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”.
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.
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)
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.
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.
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.
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.
Neel Mehta, Director and Co-founder, Asteria Aerospace Ltd, said that sectors such as defence, space, AI/ML and biotech, among others, are key beneficiaries of Deep Tech…reports Asian Lite News
The development of digital public infrastructure (DPI) in India in the last decade has steered the growth of startups in the country, industry leaders said on Saturday.
Addressing FICCI’s annual general meeting and annual convention Sanjeev Bikhchandani, Founder of Info Edge India Ltd, said that research and development in India is currently in a better position than it was a decade ago, which has spurred a cluster of startup IPOs in the Delhi-NCR region.
“While there is no shortage of funding for early-stage startups, support from the government in providing potential client markets in sectors like defence-tech, drones are, however, pertinent since government is the main buyer,” he told the gathering.
Ghazal Alagh, Co-founder of Mamaearth (Honasa Consumer Pvt Ltd), said that the startup ecosystem is evolving in favour of entrepreneurship.
“The rising middle class in India has been a large enabler for consumer facing companies. State-level incubation centres, setup by the government, are a remarkable step to empower students to build their startup,” she said.
According to Rohit Bansal, Co-founder, Titan Capital and Ace Vector Group, measures such as providing a level-playing field between public and private companies in terms of taxation are essential to boost the startup ecosystem in the country.
Neel Mehta, Director and Co-founder, Asteria Aerospace Ltd, said that sectors such as defence, space, AI/ML and biotech, among others, are key beneficiaries of Deep Tech.
“Public awareness with reference to the use of drones has improved significantly in India over the last decade. The deeptech sector had also seen new-age job creation, and building on the right theme and ensuring proper execution can be the key for a startup’s success,” he noted.
PhysicsWallah turned unicorn last year with a $100 million round from WestBridge Capital and GSV Ventures….reports Asian Lite News
Edtech company PhysicsWallah (PW) on Sunday said it is laying off 70 to 120 employees, a first job cut at the company which turned unicorn last year.
In a statement, the company said it regularly assesses performance through mid-term and end-term cycles.
“For the cycle ending in October, less than 0.8 per cent of our workforce, ranging from 70 to 120 individuals with performance concerns — may be asked to transition,” said Satish Khengre, CHRO, PW.
“Our primary focus remains on fostering a dynamic, high-performing team. We plan to hire an additional 1,000 employees in the next six months, reinforcing our commitment to growth,” Khengre added.
According to an earlier report in Entrackr, citing sources, “the company made the move citing cost-cutting exercise”.
Employees across content, operations and other departments were laid off, according to the report.
PhysicsWallah turned unicorn last year with a $100 million round from WestBridge Capital and GSV Ventures.
The company’s revenue from operations increased 9.5X to Rs 233 crore in FY22 from Rs 24.6 crore in FY21.
Founded in 2016 by renowned YouTube STEM educator Alakh Pandey and later joined by tech executive Prateek Maheshwari, PhysicsWallah offers online and offline courses and study materials for JEE, NEET and other engineering entrance and state board exams.
PW has over 31 million subscribers spread across 61 YouTube channels.
Moreover, its mobile app has been downloaded over 10 million times and boasts a 4.5 rating on the Google Play Store.
Expand North Star 2023 has attracted participation from over 1,800 startups representing more than 100 countries, along with the presence of over 1,000 investors collectively managing assets totalling over $1 trillion….reports Asian Lite News
H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance of the UAE, today opened Expand North Star 2023, the world’s largest exhibition and conference for startups organised by the Dubai World Trade Centre (DWTC). The event, being held from 15-18 October at the Dubai Harbour, is hosted by the Dubai Chamber of Digital Economy (DCDE), one of three chambers operating under the umbrella of the Dubai Chamber.
Speaking on the occasion, H.H. Sheikh Maktoum said the organisation of Expand North Star 2023 reflects the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform Dubai into one of the world’s leading digital economies, bolster its competitiveness across the global market and boost the digital economy’s contribution to the emirate’s economy.
“We firmly believe in the potential of our national talent to fuel the growth of the digital economy and enhance Dubai’s position as a leading global hub for digital innovation, all while contributing to the development of innovative technology and AI-based solutions,” His Highness said.
“With the digital economy constituting a crucial pillar of the Dubai Economic Agenda (D33), this event aligns with our commitment to create new economic value through digital transformation, with an anticipated annual value of AED100 billion. This endeavour consolidates Dubai’s standing as a global hub for the digital economy and a significant player in the global digital landscape,” HH Sheikh Maktoum further stated.
Expand North Star 2023 has attracted participation from over 1,800 startups representing more than 100 countries, along with the presence of over 1,000 investors collectively managing assets totalling over $1 trillion.
Flexibility and Diversity
Following the opening ceremony, H.H. Sheikh Maktoum bin Mohammed toured the exhibition’s pavilions, accompanied by His Excellency Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy & Remote Work Applications and Chairman of DCDE; His Excellency Abdulaziz Al Ghurair, Chairman of Dubai Chambers; His Excellency Helal Al Marri, Director General of Dubai’s Department of Economy and Tourism; His Excellency Ahmed Bin Byat, Vice Chairman of DCDE; Saeed Al Gergawi, Vice President of DCDE; and Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers.
During his tour, His Highness was briefed by Saeed Al Gergawi on the exhibition’s role in supporting Dubai’s transformation into one of the world’s most flexible, diversified, and technology-driven digital hubs.
With 250 of the world’s leading digital experts participating as speakers at Expand North Star 2023, the event serves as a platform to facilitate connections between stakeholders in the government sector, investors, and accelerators, along with leading industry experts, innovators, and tech startups from around the globe. The event is also recognised as the primary choice for investors from 70 countries for deal-making, co-financing, and fundraising. This presents promising opportunities for ambitious digital startups to secure funding and expand their operations.
His Excellency Helal Al Marri said that Dubai’s unique development model is not only centred on the pursuit of leadership across various economic sectors but also on the aspiration to position Dubai as a driving force within the global economy. This entails creating opportunities for growth and development for businesses of all sizes and disciplines. “Startups have consistently been a focal point for our visionary leadership, as reflected in the D33 Agenda. This agenda places a strong emphasis on fostering a global business-friendly environment and sustainability, supported by an ideal business climate for investors and entrepreneurs. This framework, underpinned by robust infrastructure, professional expertise, and services, provides the emirate with a significant competitive advantage.”
Al Marri added: “Expand North Star 2023 mirrors Dubai’s strong commitment to supporting entrepreneurship and startups, in line with its aspirations to attain a leading global position in the digital economy. The event serves as a platform for forging new partnerships, paving the way for their success, starting from Dubai. Over the past years, the city has seen the emergence of numerous startups that have grown into billion-dollar companies, and the city is determined to further amplify this trend in the near future. Dubai aims to become the primary global launchpad and the preferred destination for promising entrepreneurs.”
His Excellency emphasised that Emirati entrepreneurs will have a significant presence at the event, featuring various activities, an exhibition area, and dedicated pavilions.
Competitive Edge
Saeed Al Gergawi said: “Expand North Star 2023 reflects DCDE’s commitment to enabling ambitious startups to access the tools they need to thrive in the emirate. It also supports Dubai’s transformation into one of the world’s leading digital economies in line with the Dubai Economic Agenda (D33), which aims to transform 30 startups into unicorns by 2033.”
Al Gergawi noted that this year’s exhibition builds on the sell-out success of last year’s North Star Dubai, which led to the launch of around 150 startups in the UAE as a result of deals signed during the exhibition.
Unique Insights
Expand North Star 2023 will host the CTO World Congress, offering unique insights into the minds of the world’s best tech architects and data scientists, as well as AI Monday, showcasing over 400 fast-scaling AI startups.
New Initiatives
Furthermore, a host of new initiatives are set to be launched at the event, including India Central, the biggest showcase of the Indian tech startup ecosystem featuring the participation of around 300 companies, as well as both Asia Fast 100 and Africa Fast 100, the largest showcase for the Asian and African startup communities bringing together 100 leading startups from each continent for a packed day of conferences, networking, and dedicated pitch competitions.
Emaratipreneur Inc., a community-driven networking and development platform designed exclusively for Emirati entrepreneurs, innovators, and investors, will feature a first-of-its-kind exhibition area for talented young innovators and startups, together with the Emaratipreneur Majlis, where panel and group discussions will shed light on creating the next generation of startup superstars, unicorns, and globally renowned entrepreneurs from the UAE’s youth ecosystem.
Other key events during the exhibition include the Supernova Challenge; a prestigious pitch competition that offers a prize fund of $200,000; Fintech Surge, which connects fintech companies and startups with financial institutions, investors, regulators, corporates, and SMEs across the MENA region; Future Blockchain Summit, the MENA region’s most immersive large-scale blockchain event; and Marketing Mania, the largest marketing and creative technology trade show in the MENA region, gathering the most prolific, imaginative, and disruptive tech forces.
Fostering a Conducive Business Environment
The DCDE pavilion at the Expand North Star 2023 will also be showcasing a number of leading initiatives aiming to boost the digital economy’s contribution to Dubai’s overall economy. These include ‘Business in Dubai’ platform, which aims to foster a conducive business environment in the city by streamlining a range of operations for companies seeking to launch or expand their activities in the emirate. The platform currently has 11 strategic partners providing services.
Other key initiatives include The Startup Guide, a comprehensive guide for digital startups, aimed at simplifying the process of setting up a business in Dubai, and Launchpad Dubai, which provides global technology companies outside Dubai – including startups, fast-growing startups, and unicorns – with the opportunity to set up in Dubai through a single platform offering services such as visa, banking, housing, and employment services.
