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Indian Startups Raise $307.8 Million in Funding This Week

Seventeen early-stage startups raised about $166.8 million, like mPokket, Ema, Hunch and Rozana, among others….reports Asian Lite News

At least 27 startups in India raised about $307.8 million this week, which includes 17 early-stage and seven growth-stage companies.

Nearly 32 early and growth-stage startups raised more than $384 million last week, startup news portal Entrackr reported on Saturday.

Seventeen early-stage startups raised about $166.8 million, like mPokket, Ema, Hunch and Rozana, among others.

Startups based in Delhi-NCR led the funding with 10 deals, followed by Bengaluru at 9 deals.

Digital lending platform mPokket raised up to Rs 500 crore (around $60 million) in debt capital from BPEA Credit’s private credit platform.

mPokket said that the funds will be used to meet the growing credit demand from its 24 million registered customer base while accelerating product development in the career accelerator and insurance verticals.

Rural e-commerce startup Rozana received $22.5 million in the latest funding round. The round was led by the investment firm Bertelsmann India Investments (BII) with participation from the VC firm Fireside Ventures and existing investors.

“With this funding, we will continue building out our logistics and supply chain infrastructure to reach new districts and empower rural communities with access to essential products,” Ankur Dahiya, CEO and Co-founder of Rozana, said in a statement.

Generative AI solutions provider Ema announced a $25 million funding round and the launch of a novel “universal AI employee.”

More than 1.14 lakh startups in India have created over 12 lakh jobs so far, the Finance Ministry said in its latest review of the Indian economy.

IndiaAI Mission Boosts Innovation in Startup Ecosystem

The industry leaders on Friday hailed the government’s IndiaAI Mission initiative, the country’s first artificial intelligence (AI) mission that was approved with an outlay of Rs 10,371.92 crore.

The IndiaAI Mission will establish a comprehensive ecosystem catalysing AI innovation through strategic programmes and partnerships across the public and private sectors.

“The focus on funding deep tech AI startups, developing open source databases, as well as domain-specific large language models will play an instrumental role in fueling AI innovation in the country, making India a global leader in harnessing the potential of artificial intelligence,” said Tilakraj Parmar, Co-Founder & CEO, QX Lab AI.

He also mentioned that the government’s move to provide financial support and a strategic roadmap for AI integration will act as a catalyst for economic growth and innovation.

Prashanth Kaddi, Partner, Consulting, Deloitte India, said that this move gives a fillip to the startup ecosystem “to drive innovation helping India leapfrog into areas such as text summarisation, video/image generation, and next-gen chatbots etc., including enablement across Indian languages”.

The Mission will be implemented by ‘IndiaAI’ Independent Business Division (IBD) under Digital India Corporation (DIC).

According to an official, the approved IndiaAI Mission will propel innovation and build domestic capacities to ensure the tech sovereignty of the country.

It will also create highly skilled employment opportunities to harness the demographic dividend of the country.

ALSO READ: India’s Global Economic Ascendancy

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India News STARTUPS News

Simplilearn Hails Startup India

Dalal said the new education policy has driven a lot of change in the sector by enabling many traditional universities to offer online courses….reports Asian Lite News

Government initiatives such as ‘Digital India’ and ‘Startup India’ are empowering different sectors of the digital ecosystem such as fintech and edtech in a very positive way, Simplilearn co-founder and COO, Kashyap Dalal, said on Saturday.

According to him, there are wide areas of interventions that the government has undertaken in the last 5-7 years, which is a boost for several digital ecosystem sectors.

“One is the entire fintech stack. We have unified payments interface (UPI), Aadhaar, KYC, online payments, and streamlining that entire piece has completely changed the face of digital transactions. That has really galvanised the space,” Dalal told IANS.

Talking about the edtech space, Dalal said the new education policy has driven a lot of change in the sector by enabling many traditional universities to offer online courses.

“These universities also partner with edtech players like us. A lot of universities would partner to build out the entire business where their faculty members would be part of the pedagogy in terms of providing the teaching and learning,” he said.

A Nasscom-led report said last month that Digital Public Infrastructure (DPIs) like UPI and Aadhaar are poised to propel India towards a $8 trillion economy by 2030, helping the country achieve a $1 trillion digital economy target.

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‘Govt Digital Push Fuels Insurtech Revolution’

The Indian insurtech sector has also come up with microinsurance products tailored specifically to protect the economically vulnerable population with insurance coverage on health, agriculture, and livelihood….reports Asian Lite News

The government’s push towards digitalisation and technology adoption has catalysed innovation within the insurtech industry, which bodes well for bolstering the growth prospects of the industry, Ankit Agrawal, Founder and CEO, InsuranceDekho, has stressed.

In an interaction with IANS, he said that the government’s decision to promote Insurtech innovation can be considered a positive step towards the development of ingenious insurance products, distribution channels, and customer engagement solutions.

“Initiatives such as the ‘Digital India’ campaign and the introduction of Aadhaar-based e-KYC have facilitated the seamless onboarding of customers and enabled insurers to offer digital insurance products and services,” Ankit Agrawal noted.

Union Budget 2022-23 likely to give more incentives to boost startups.

Furthermore, to give the desired impetus to the sector, the government has also launched Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) to provide financial protection against healthcare expenses for millions of vulnerable families, thereby expanding the health insurance coverage.

The Indian insurtech sector has also come up with microinsurance products tailored specifically to protect the economically vulnerable population with insurance coverage on health, agriculture, and livelihood.

“The products have been devised with the intention of driving maximum insurance for the otherwise underprivileged sections of society,” said Agrawal.

In addition to this, the industry has been making great strides to expedite technology integration with the help of Insurtech startups to leverage digital platforms for facilitating distribution, claim processing, and customer engagement aimed at enabling easy access to various insurance products.

Various studies have shown that increased insurance penetration multiplies the economy by reducing overall financial distress and making long-term growth capital available to important nation-building industries.

“Working towards the larger goal of becoming a fully insured nation by 2047, the government should consider the exemption of GST on insurance policies to bring down insurance premiums,” Agrawal said.

This can further be supported by a rise in tax exemption limits under 80C to prioritise savings and promote insurance coverage, for giving the desired fillip to economic growth, he added.

ALSO READ: India Tightens Grip on Tech

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Business Economy STARTUPS News

Startup Challenges Mount as ‘Poster Boys’ Tumble

Union Budget 2022-23 likely to give more incentives to boost startups.

Veteran investor and Info Edge Founder Sanjeev Bikhchandani said that he believes that good governance is important as companies grow….reports Asian Lite News

Recent governance issues with well-funded and “poster boys” of startups have added to the ongoing bearish trend for the ecosystem amid the funding winter, industry leaders and experts said on Wednesday.

As startup majors Paytm and Byju’s make the headlines for several issues amid the regulatory heat, investors have turned cautious about conducting a thorough due diligence process.

Veteran investor and Info Edge Founder Sanjeev Bikhchandani told IANS that he believes that good governance is important as companies grow.

“You cannot build a sustainable large valuable enterprise if you are not governed well. Therefore, I would urge startup founders to put more emphasis on good governance,” he added.

According to Shrijay Sheth, Founder, Legalwiz.in, financial mismanagement and compliance-related issues are surfacing often these days.

“While the startup founders will assume a role of a custodian of investor’s money, it is also important for the investors to take an active role in flagging such issues in time, especially, when they hold a board or an observer seat.

“Most of these issues surface while raising funds or when the business lacks financial performance,” he noted.

Incubators, accelerators and other government funded programmes need to educate nascent stage founders, according to experts.

First-time entrepreneurs stay non-compliant largely because of lack of knowledge, than any other reason.

“Many requirements like labour-related compliance, POSH policy implementation, or maintaining basic accounting hygiene remain unaddressed due to lack of awareness. This needs to be addressed,” said Sheth.

Due diligence and corporate governance are crucial factors at every stage of a startup’s journey.

“At DevX Venture Fund, we have always emphasised strong corporate governance and ethos. We invest at an early stage and hence it is crucial to set the right expectations of how an organisation should run,” Umesh Uttamchandani, CoFounder, DevX Venture Fund, told IANS.

Conducting regular monthly calls with the portfolio startups and providing clarity to “our investors happens to be of utmost importance as the founders ought to be accountable after raising funds and enable potential investors to engage with the founders who have clean books”.

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‘Indian Startups Reach Global Standards’

Oberai also mentioned that the ‘Info Edge’ underwent a transformative shift in the 2010-2015 era, anticipating the rise of mobile phones as a central platform….reports Asian Lite News

The startup landscape in India is now on par with global standards, witnessing a shift where startups have become more mainstream, industry leaders said on Tuesday.

Addressing the India Digital Summit (IDS) 2024, Hitesh Oberoi, Co-Promoter, Managing Director & CEO of Naukri, said, “There’s a notable rise in the quality of startups and their founders, with a shift from skepticism to a widespread eagerness to collaborate with startups.”

“Deep tech startups, particularly those leveraging fundamental technologies for innovation, show great promise for the future,” he added.

IDS is being organised by IAMAI in partnership with the Ministry of Electronics and Information Technology (MeitY), the Ministry of Information and Broadcasting (MIB), the Ministry of Tourism, UIDAI, the Indian Cybercrime Coordination Centre (I4C), Government eMarketplace, In-Space and Skill India Digital.

Oberai also mentioned that the ‘Info Edge’ underwent a transformative shift in the 2010-2015 era, anticipating the rise of mobile phones as a central platform.

“Recognising the importance of adapting to this shift, we reimagined our user experience for mobile, facing challenges in hiring designers and Android developers trained in web development. Today, 70 to 90 per cent of our business thrives on the mobile platform,” he said.

Oberoi concluded by advising newer startups and entrepreneurs that generating revenue from customers is vital, instead of relying solely on investors.

ALSO READ: Bank of Baroda Forecasts India’s Q3 FY24 GDP Growth at 6.4%

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‘India third-largest startup nation today’

Thakur emphasized the remarkable growth of the nation’s startup landscape….reports Asian Lite News

Union Minister for Youth Affairs and Sports, Anurag Singh Thakur said on Monday that India has solidified its position as the third-largest startup nation with over one lakh startups.

Thakur also emphasized the remarkable growth of the nation’s startup landscape.

Speaking at the Rozgar Mela in Punjab’s Jalandhar, Thakur said, “More than one lakh government jobs were provided today through Rozgar Mela organized at 47 locations across the country. PM Modi has fulfilled his promise of providing 10 lakh jobs in a year.”

He further highlighted that in addition to this achievement, loans totalling Rs 34 crore were distributed under the Pradhan Mantri MUDRA Yojana (PMMY), providing employment opportunities to crores of people. Similarly, 78 lakh street vendors benefited from loans provided under the PM SVANidhi Scheme.

“Likewise, under the startup movement, India stands as the third startup nation with over one lakh start-ups,” he added.

During the Rozgar Mela, Prime Minister Narendra Modi distributed appointment letters to newly recruited individuals via video conferencing on Monday.

While addressing the event through video conferencing, the Prime Minister congratulated the youths and their families, stating, “Today, more than 1 lakh youth have received appointment letters for government jobs. You have achieved this success through hard work. I congratulate you all and your families very much.”

Hitting out at the previous government over job delays, PM Modi said, “The right to give jobs to the youth in the Government of India is continuously progressing at a fast pace. In earlier governments, it used to take a very long time from the issue of job advertisement to the issuance of appointment letters. Taking advantage of this delay, the game of bribery was also rampant during that time. We have now made the recruitment process in the Government of India completely transparent.”

“Not only this, the government is very insistent that the recruitment process be completed within the stipulated time. With this, every youth has started getting equal opportunities to prove his ability,” he added.

The Prime Minister applauded the central government for making the recruitment procedure transparent. Prime Minister Modi launched the ‘Rozgar Mela’ campaign on October 22, 2022, marking the beginning of the initiative to provide 10 lakh government jobs. (ANI)

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Startup Tax Benefits Extend to March 2025

As many as 2,975 government-recognised startups have been granted Income Tax exemptions so far…reports Asian Lite News

In a respite for the startup ecosystem, the Centre on Thursday announced to extend tax benefits for startups and investments made by sovereign wealth and pension funds to March 2025.

Certain tax benefits to startups and investments made by sovereign wealth or pension funds as also tax exemption on certain incomes of some International Financial Services Centre (IFSC) units are expiring on March 31 this year.

“To provide continuity, I propose to extend the date to 31.3.2025,” said Finance Minister Nirmala Sitharaman while presenting the Interim Budget on Thursday.

“As for tax proposals, in keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties,” she added.

Anil Joshi, Managing Partner, Unicorn India Ventures, said that the extension of tax exemption to startups is a good gesture and provision for Rs 1 lakh crore toward sunrise segment at nominal or zero interest rate will certainly help small businesses.

“No change to direct and indirect tax was also expected, however we may see new rates in full budget to be proposed in July 2024,” he said.

Rishabh Goel, Co-Founder and CEO, Credgenics, said that in a bid to sustain the growth momentum of existing startups, the government has extended tax benefits by an additional year.

As many as 2,975 government-recognised startups have been granted Income Tax exemptions so far, according to the Department for Promotion of Industry and Internal Trade (DPIIT).

Under the ‘Startup India’ programme, the government provides Income Tax exemption.

In September last year, the government notified new angel tax rules that comprise the mechanism to evaluate the shares issued by unlisted startups to investors.

Startups registered with the DPIIT were exempted from the new norms. The government highlighted that the exemption will benefit over 80,000 startups.

ALSO READ: Sitharaman proposes to raise capital expenditure by 11.1%

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Gujarat India News STARTUPS News

Gujarat, Karnataka, Kerala, TN Ranked Top States For Startups

The Minister noted that India has emerged as the third-largest startup ecosystem globally, realizing the dreams of countless entrepreneurs and introducing innovative ways of doing business…reports Asian Lite News

Gujarat, Karnataka, Kerala, and Tamil Nadu were ranked as the best performing states in India at the startups awards function held here on Tuesday.

Addressing the startup awards and state ranking awards function, Commerce and Industry Minister Piyush Goyal said startups are playing a pivotal role in India’s journey towards becoming a developed nation by 2047.

He highlighted the diverse sectors in which startups are making substantial contributions, ranging from MedTech, FinTech, AgroTech to the aviation sector, drones, and simulators. He identified tourism as a sector with untapped potential, encouraging startups to explore innovative ideas around sustainable tourism.

He pointed out that PM Modi had said at the Vibrant Gujarat summit that the priority is New Age Skills, Futuristic Tech, AI & Innovation.

Expressing appreciation for the achievements in sectors like millets and food processing, Goyal urged startups to focus on new areas such as artificial intelligence (AI). He encouraged them to come up with ideas that make life easier and revolutionise existing ways of working.

The minister commended the significant progress made in the startup sector over the last eight years, stating that what was once a novelty has now become an integral part of the national mainstream.

Goyal expressed confidence in the entrepreneurial spirit of both the young and old, urging them to contribute their unique perspectives and ideas to the startup ecosystem. He reiterated that age should not be a barrier to engage with new ideas and foster innovation.

The Minister noted that India has emerged as the third-largest startup ecosystem globally, realizing the dreams of countless entrepreneurs and introducing innovative ways of doing business.

During his address, Goyal outlined key initiatives that will be taken to further support startups, including the categorisation of startups into different sectors for more focused interactions, the sanitisation of data to identify their locations and track development stage of the startups, and efforts to ensure all startups are registered on the Department for Promotion of Industry and Internal Trade (DPIIT) portal.

The Minister called for greater collaboration and mentoring through the MAARG portal – Mentorship, Advisory, Assistance, Resilience and Growth of Startup India. He emphasised the importance of outreach and on-boarding startups with the Government e-Marketplace (GeM) as the process for onboarding of startups has been simplified. He encouraged startups to register for patent, copyright, and trademark protections as the fees have been reduced for them.

Goyal announced that ‘Startup Maha Kumbh’ is scheduled to be organised in March 2024. He assured continued government support for the startup ecosystem, inviting entrepreneurs to leverage the vast consumer market and work collaboratively to transition from an emerging to a developed startup system.

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Unicorn Boom Slows

2023 witnessed 67 mega deals ($100 M+ rounds) worth $21.2 Billion, compared to 112 such investments worth $31.8 Billion in 2022….writes Sanjeev Sharma

The value of investments by Private Equity – Venture Capital (PE-VC) firms in India fell by 38 per cent to less than $30 Billion in 2023. PE-VC firms invested $29.7 Billion (across 756 deals) in Indian companies in 2023, compared to $47.6 Billion (across 1,362 deals) in the previous year, as per Venture Intelligence.

2023 witnessed 67 mega deals ($100 M+ rounds) worth $21.2 Billion, compared to 112 such investments worth $31.8 Billion in 2022.

The $2.4 Billion investment in Manipal Hospitals by Temasek (which gained majority control) and TPG Capital was the largest PE-VC investment in 2023. This was followed by the $1.35 Billion buyout of education loans focused HDFC Credila by Baring Asia and ChrysCapital and the $1 Billion investment by Qatar Investment Authority (QIA) in Reliance Retail.

2023 saw just two Unicorn companies (VC-funded startups valued at $1 Billion or more) being created, compared to 21 in 2022 (and a record 44 in 2021). Quick commerce startup Zepto (which attracted $ 231 million led by foreign investors in August 2023), was joined on the unicorn list towards the year end by consumer & small business loans firm Incred Finance (which attracted $60 million from domestic Family Offices and HNIs).

“While large ticket PE investors focused their attention towards sectors like Healthcare, Financial Services and Infrastructure, 2023 saw the slowdown in Growth- and Late- Stage investing trickle into the Venture Capital segment as well,” noted Arun Natarajan, Founder of Venture Intelligence.

“Towards the year end, on the back of strong public markets, private markets received a dose of optimism, which also translated into a few large growth stage tech investments going through,” he added.

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India Slips to Fourth Global Ranking in Startup Funding for 2023

The last quarter (Q4) this year recorded the lowest funding of $957 million to date, marking it the lowest-funded quarter since Q3 2016…reports Asian Lite News

Making a dent in India’s startup growth story, the country slipped to fourth position in the global ranking among the highest-funded geographies in 2023, as it recorded lowest funding in five years.

After grabbing the third spot globally in 2021 as well as in 2022, India ranked fourth behind the US, the UK and China this year, receiving only $7 billion in total funding (till December 5), according to data compiled by global market intelligence platform Tracxn.

In the third quarter (Q3) this year, India even slipped to fifth position among the highest-funded countries — behind the US, the UK, China and France.

Q3 2023 raised a total of $1.5 billion, which is a 30 per cent drop from Q2 2023 and a 54 per cent drop as compared to Q3 2022.

The last quarter (Q4) this year recorded the lowest funding of $957 million to date, marking it the lowest-funded quarter since Q3 2016.

“India continues to experience the effects of the funding winter. Following an increase in funding in Q4 2022, India Tech is seeing a decline in funding every quarter, with a third consecutive drop in funding in Q3 2023 making it the least funded quarter in 2023 and also the least funded quarter in the last 5 years,” the report showed.

Despite the declining funding inflow, India has maintained its position in top 5 geographies in terms of total funding this year.

For 2023, the funding declined across all stages, with late-stage funding dropping over 73 per cent, followed by early-stage funding (70 per cent) and seed-stage funding (60 per cent).

The decline is primarily due to the biggest drop in late-stage funding, by over 73 per cent to $4.2 billion in 2023 from $15.6 billion in 2022.

The number of $100 million+ rounds recorded were only 17, dropping by 69 per cent compared to last year, said the report.

ALSO READ-Digital Public Infrastructure Fuels Decade of Startup Growth in India