Category: STARTUPS News

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Impressive Paytm!

Over the last one year, the company’s merchant subscriber base more than doubled to 79 lakh as of June 2023 with its merchant base expanding to 3.6 crore…reports Asian Lite News

India’s leading payments and financial services company Paytm has shown yet another impressive quarterly growth, registering a bumper revenue uptick of 39 per cent YoY, taking its revenue to Rs 2,342 crore in Q1FY24. This was achieved by increase in GMV, merchant subscription revenues, and growth of loans registered on the platform.

Paytm’s EBITDA before ESOP saw a significant improvement of Rs 359 crore YoY to Rs 84 crore, compared to Rs 52 crore in Q4FY23 (excluding the UPI incentive). In Q1FY24, Paytm further grew its contributing profit, up by 80 per cent YoY to Rs 1,304 crore. Driven by the rise in contribution margin and consistent improvement in profitability, EBITDA before ESOP margin also improved to 4 per cent.

Over the last one year, the company’s merchant subscriber base more than doubled to 79 lakh as of June 2023 with its merchant base expanding to 3.6 crore, a robust growth for its pioneering devices like Paytm Sound Box and Paytm Card machines. Contribution margin of the company expanded to 56 per cent this quarter, an increase of 12 per cent point YoY, with increase in net payment margin and growth in loan distribution business.

Its payments services revenue grew 31 per cent YoY to Rs 1,414 crore for Q1FY24.

As a merchant payments leader, Paytm continues to see sustained traction and earns more than Rs 100 to Rs 500 per month per device. Meanwhile, the number of merchant loans distributed grew 141 per cent YoY in Q1 FY 2024, while the value of merchant loans grew 232 per cent YoY to Rs 2,744 crore.

Paytm.

The revenue from financial services offered by the fintech major saw a bumper growth, soaring 93 per cent YoY to Rs 522 crore. With loan distribution forming a core of the company’s aggressive business growth strategy, the value of loans disbursed stood at Rs 14,845 crore, up 167 per cent  YoY.

The number of postpaid loans distributed by Paytm grew 49 per cent YoY, while the value of postpaid loans grew 138 per cent YoY.

Another groundbreaking growth was registered under the personal loans category with Paytm achieving growth of 128 per cent YoY, with the value of personal loans growing 202 per cent YoY to Rs 4,062 crore.

Paytm. (Photo: Twitter/@Paytm)

The total number of unique borrowers who have taken loan through Paytm platform has increased from 49 lakh to 1.06 crore.

With increased customer engagement, its Average Monthly Transacting Users (MTU) for Q1 FY 2024 grew by 23 per cent YoY to 9.2 crore as adoption of mobile payments for consumers in India continues.

Paytm’s active user base continues to present significant upsell opportunities, providing businesses with ample opportunities to monetise. In Q1 FY 2024, Commerce & Cloud revenue grew by 22 per cent YoY to Rs 405 crore.

Furthermore, due to positive EBITDA before ESOP, improvement in working capital, and interest income, its cash balance has increased to Rs 8,367 crore as of quarter ending June 2023, as compared to Rs 8,275 crore as of quarter ending March 2023.

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Business Kerala STARTUPS News

Kerala Startup Bags Indian Icon Award in Cyber Security  

This is the first time that a startup from Kerala has been chosen for such a prestigious recognition…..reports Asian Lite News

Kerala based startup, Tech by heart, bags national level award in cyber security. Tech byheart, a Kochi based startup was awarded this year’s Indian Icon Award, jointly given by the Global Chamber of Consumer Rights and Kites Craft Production.

It is for the first time a startup from Kerala is being selected for such an honour. The company’s CEO, Sajad Chemmukkan received the award from former Puducherry Governor, Kiran Bedi at a function held at New Delhi’s Dwarka.

Around 150 companies from different backgrounds were represented at the ceremony. Three months before, Tech by heart was also selected for another prestigious honour.

The company was selected as the best Indian startup in the area of cyber security. The award was jointly presented by two world famous NGO’s namely, the World Humanitarian Foundation and Trident Communication.

The company started off as a startup in 2017, under the leadership of the present Chairman Sreenath Gopinath and the CEO Sajad Chemmukkan. The startup shot to success within a short span of time and now has seven offices.

Apart from Kochi, it has offices at Kottakkal, Kannur, Bengaluru and Dubai. The company has more than fifty employees spread across these locations.

Tech by heart is also keen in acquainting students to the new age opportunities in cyber security.

The programmes conducted to spread awareness about cyber security, cyber forensics, ethical hacking, website protection and digital marketing among students and professionals were widely acclaimed.

The company is also known to have joined hands with the highest number of educational institutions in the country to impart training in cyber security. It has also conducted cyber security awareness programmes in hundreds of educational institutions.

ALSO READ: Dry season in Startup funding

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Business STARTUPS News

Dry season in Startup funding

Govt goes bullish on startups with ESOP holiday, tax relief.

As funding plummets, startups are hunkering down, reducing burn rate and expediting their path to profitability…reports Asian Lite News

While the Indian startup ecosystem experienced a sharp funding peak during FY22 reaching $50 billion, a gradual onset of the funding winter over the subsequent quarters led to a 70 per cent drop in FY23 to around $15 billion, a report showed on Tuesday.

As funding plummets, startups are hunkering down, reducing burn rate and expediting their path to profitability, according to the report by market research firm Redseer.

“The increasing cost of capital and interest rates, recession in developed markets, a decline in the value of tech stocks, and the slowdown in consumer internet growth have all been challenges for sustained funding,” said Mohit Rana, partner at Redseer.

There are about 100 unicorns and less than 400 public companies with a market cap of more than $1 billion in the country.

Ownership of founders in startups is also limited (0-20 per cent) in 59 per cent of private companies as compared to public companies (over 50 per cent) in 65 per cent of public companies.

As startups sail through rough waters, boards need to ensure future alignment and take more responsibility to guide and support founders during challenging times, Rana added.

“Listed tech companies have made significant improvement over the last five quarters. Paytm launched new products, expanded into new business segments, and upsold/cross-sold to existing customers to increase revenue per customer and reduce CAC. Zomato increased take rates from restaurant partners and delivery costs from customers,” he said.

According to the report, the number of profitable unicorns is projected to grow across most sectors in three to four years, from 30 in FY22 to 55 in FY27.

Nearly 50 per cent of unicorns are expected to become profitable by FY27, while 20 per cent will likely struggle due to regulatory challenges, plummeting demand and unclear business models.

They also expect some of the struggling unicorns to pivot to new models, get acquired or close entirely, the report noted.

On the bright side, profitable unicorns in India could generate 5 times the profit in FY27 as they did in FY22.

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Business India News STARTUPS News

CarTrade Tech buys OLX Autos’ India biz

The transaction will be an all-cash deal and the acquisition is likely to be completed within 30 days….reports Asian Lite News

CarTrade Tech on Monday said it is acquiring Sobek Auto India Private Ltd, the company that owns OLX India’s auto sales division, for Rs 537 crore.

In a filing with the Bombay Stock Exchange (BSE), CarTrade Tech said it will buy 100 per cent of Sobek’s shares and is making the purchase “to provide synergistic benefits to the existing businesses of CarTrade Tech”.

“This is to inform you that on July 10, 2023, CarTrade Tech has entered into a share purchase agreement with Sobek Auto India Private Limited, and its holding company OLX India BV, for acquisition of 100 per cent stake of Sobek from OLX India BV,” the company said in its filing.

The transaction will be an all-cash deal and the acquisition is likely to be completed within 30 days.

Sobek is being acquired at a cost of Rs 537.43 crore to be paid on the completion date of the acquisition.

CarTrade Tech said the acquisition is in furtherance of the strategic objectives of the company to undertake investments that provide synergistic benefits to its existing businesses.

According to the exchange filing, OLX India also sold its classifieds internet business to Sobek on June 30.

Last month, OLX Group, along with Prosus, the classifieds business arm of the global investment group, announced a reduction of approximately 800 jobs worldwide. This decision comes as OLX Group begins to wind down its automotive business arm, Olx Autos, in various regions after an extensive search for potential buyers and investors.

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Economy India News STARTUPS News

Indian startup ecosystem faces tough time

Fintech, Software-as-a-Service (SaaS) and direct-2-consumer (D2C) continued to be the most funded sectors…reports Asian Lite News

The Indian startup ecosystem reported the lowest six-month funding in the last four years, in the first half of this year at $3.8 billion across 298 deals — a decline of nearly 36 per cent as compared to the second half of 2022 ($5.9 billion), a report showed on Sunday.

Fintech, Software-as-a-Service (SaaS) and direct-2-consumer (D2C) continued to be the most funded sectors, according to the PwC India report.

Growth and late-stage funding deals accounted for 84 per cent of the funding activity in the January-June period. These represented 43 per cent of the total count of deals in this period.

The average ticket size in growth-stage deals was $19 million and late-stage deals was $52 million, said the report.

“There is a slowdown in startup funding despite significant untapped capital reserves held by venture capitalists (VCs). Active VC firms in India have secured new funds in the past year and we can expect the pace of investments to pick up in the next few months,” said Amit Nawka, Partner, Deals & India Startups Leader, PwC India.

In the interim, there has been an increase in the due diligence being carried out by investors before making investments, both in terms of detailing as well as coverage, he added.

Early-stage deals accounted for 57 per cent of the total funding in H1 CY23 (in volume terms). In value terms, early-stage deals contributed to approximately 16 per cent of the total funding but was at its lowest as compared to the previous two years.

Bengaluru, Delhi-NCR, and Mumbai continue to be the key start-up cities, representing around 83 per cent of the total startup funding activity.

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Business Economy STARTUPS News

Digital wallets transactions boom

The study found that in a highly congested wallets landscape, diversifying their appeal to users is vital….reports Asian Lite News

The total value of digital wallets transactions is forecast to rise from $9 trillion in 2023 to $16 trillion in 2028, a growth of 77 per cent, a report showed on Monday.

This trend is driven by growth across both developed and developing markets, as the increased adoption of advanced services such as BNPL (Buy Now Pay Later) and micro-loans drives end-user engagement, according to Juniper Research.

“Advanced services give digital wallet providers an opportunity to differentiate themselves in a congested market and generate additional revenue,” said research author Michael Greenwood.

Super app strategies, which many digital wallets are pursuing, will rely on the effective deployment of advanced services at scale, he added.

The study found that in a highly congested wallets landscape, diversifying their appeal to users is vital.

The report identified advanced services as a key source of revenue growth for digital wallets.

Advanced services, such as BNPL or microloans, are allowing digital wallet providers to diversify their revenue.

The popularity of BNPL, especially among younger consumers, will draw greater numbers of users, and generate additional revenue.

This approach can be seen with Apple’s roll-out of add-on services, including Apple Pay Later.

The research found that security benefits are a key driver of digital wallet use in eCommerce in developed markets.

Many consumers do not wish to enter card information online.

With digital wallets, this issue is reduced, as tokenisation enables card and other payment information to be used in a highly secure way.

The research also identified that as digital wallets become broader, including elements of digital identity, convenience will play a greater role; enabling wallet services to act as an all-inclusive app for financial wellbeing.

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Business Economy STARTUPS News

Leverage Edu sets goal to double revenue

With the latest round of funding, Leverage Edu aims to strengthen its position in existing markets, while also expanding into newer student mobility corridors…reports Asian Lite News

Global study abroad platform Leverage Edu has closed its Series C round to focus on doubling revenue in FY24, its Founder and CEO Akshay Chaturvedi has announced.

Princeton-based Language Testing conglomerate ETS led the round along with existing investors, Blume Ventures, DSG Consumer Partners, and Kaizenvest PE.

According to an Economic Times report, the company has raised around $40 million and the latest valuation stands at about $150 million. “We have had the privilege to partner with long-term investors, who we believe will help us in executing the vision and strategy across this next phase. This funding round and association will enable us to innovate in the space of student education and take it to the next level,” Chaturvedi, Founder and CEO of Leverage Edu & Fly, said in a tweet.

With this latest round of funding, Leverage Edu aims to strengthen its position in existing markets, while also expanding into newer student mobility corridors.

The company will also pilot new go-to-market strategies to further reduce customer acquisition costs and continue doubling down on their content-first and product-first approach to drive efficiencies, enhancing the value proposition for students.

Speaking about Fly Finance & Fly Homes, Akshay said, “We are now more obsessed with a student’s ‘complete success’, right till the end. That’s what birthed Fly Finance 1.5-2 years back and now Fly Homes. Lots more 0>1 happening here. Adrenaline pumping.”

Looking ahead, Leverage Edu aims to surpass its current revenue, aiming to more than double it this Financial year, and achieve full-year EBITDA in the next financial year.

“Publicly stated goal remains the same. We want to IPO in the next few years. As a value stock. Where we can retain the same DNA (of #StudentFirst) for Shareholders as well, not just the believers of today but even the guy who enters at that time, playing our absolute best to make them win,” said Chaturvedi.

Speaking about being EBITDA positive and profitability, he highlighted that “We aim to be EBITDA positive by next financial year and our confidence of achieving profitability this year itself”.

“We want to infuse tech and innovate for each of our stakeholders including students, universities, partners, support staff et al – to make ourselves more efficient, make service TAT topmost not just in our industry but among the best in the world,” he added.

Chaturvedi expressed deep appreciation for the dedicated team at Leverage Edu, saying he is “privileged to build this alongside a smashing team”.

“The 200 Leveragians who own ESOP. The TGIS winners. Leverage = them, their incredible journeys as well. + fortunate to have super supportive existing investors, who have been patient advisors, helped navigate in challenging times, trusted, coached, and always put the business first,” he mentioned.

“It’s been fun growing up. Onto the 7th year now. With big dreams. Head down. Ambitious, but cautious. Believer of the macros, but in love with the granularity of the micros that our easy-on-outside complex-on-inside business is. Rest, the party has only begun. Leverage It!” he added.

Founded in April 2017, LeverageEdu helps students from India, Nigeria, Nepal and other emerging countries land higher education opportunities abroad.

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Economy India News STARTUPS News

‘Startups should have only one boss’

Murthy also addressed the feeling of uncertainty and self-doubt among startup founders and advised not to panic and to trust in God…reports Asian Lite News

Startups should have only one, not more than one boss, said Narayana Murthy, founder of tech major Infosys on Saturday, sharing lessons on how to build a startup.

“Every startup company must have only one leader. There cannot be two or three leaders. Just one leader,” said Murthy in a candid conversation with his son, Rohan Murthy, Founder of Soroco at Moneycontrol Startup Conclave 2023.

“Once the managerial phase comes in, you invite managers to create systems and processes, establish protocols, invite independent directors, and have a good governance mechanism,” Murthy said on devising leadership and organisational structure of a company.

Govt goes bullish on startups with ESOP holiday, tax relief.

Further, he stated that key attributes of entrepreneurs include “the power of imagination”, “innovation” and comfort with “doing something unusual”.

“Passion fuels your energy, enthusiasm, and ability to achieve the target, and for this, the leader must have an articulated value system.”

When a business is in its nascent steps, hirings should be focussed “on competence,” without which, “nothing will happen”.

“The second is the value system. In the beginning, everybody has to trust everybody else implicitly. The only thing the employees have are your words. For this, you must be authentic.”

He also implores employees to work together “as a team, in unison, there is a high probability of people buying into your vision, and that vision must have something in it for everybody.”

Murthy also addressed the feeling of uncertainty and self-doubt among startup founders and advised not to panic and to trust in God.

“You should not panic. During uncertain times, I would crack jokes in the office and talk to them about how other people have gone through such times as well, and how God is with us,” he said, sharing his example.

“Sometimes, logic doesn’t suffice. There are moments when one must transcend logic, embrace faith, and believe in God.”

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Business India News STARTUPS News

‘Addressable startup market could only be 10 cr’

Both the founders stressed that investors and founders may have overestimated the potential size of the Indian market…reports Asian Lite News

As the Indian startup ecosystem goes through a turbulence amid corporate governance concerns being raised, Zerodha co-founder and CEO Nithin Kamath on Friday said the total addressable market size for startups in the country could only be around 10 crore (100 million).

Addressing the gathering at the startup conclave organised by Money Control in Bengaluru, both the founders stressed that investors and founders may have overestimated the potential size of the Indian market.

“The actual monetisable market size is a subset of 100 million. India is a developing country and evolving very fast, but as of now it is a subset of 100 million,” said Kamath.

According to PhonePe co-founder and CEO Sameer Nigam, even with an annual active user base of 300 million, only 100 million would likely be buying PhonePe’s various financial services products.

“People are projecting revenues and not margins and that is the fundamental problem. The fear of missing out or FOMO model is playing out. Margins are getting eroded because of too many players,” Nigam was quoted as saying.

“We are seeing very strong results early on in the lending space. We are riding the wave of a robust and strong economy,” he noted.

PhonePe could reach 500 million users by Diwali this year, said Nigam.

There was no new unicorn in India in the first half of 2023 as startup funding plunged more than 70 per cent in the January-June period from a year ago, signalling that the funding winter is here to stay as several top unicorns continue to face economic downturn.

The first six months witnessed Indian startups raise just $5.48 billion, from $19.5 billion they raised during the same period last year, according to data by market intelligence firm Tracxn.

In the first half this year, the startup ecosystem saw 546 deal rounds, a significant drop from the total number of rounds at 1,570 in the same period last year.

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Business India News STARTUPS News

Another Indian unicorn in deep crisis

PharmEasy which was once valued at $5 billion, plans to raise nearly $300 million at “a 90 per cent markdown from the previous valuation”…reports Asian Lite News

The next big Indian unicorn that has reached troubled waters is online pharmacy startup PharmEasy which, according to multiple reports, is in deep crisis amid sharp valuation cut as it seeks new funding.

According to a TechCrunch report citing sources, PharmEasy which was once valued at $5 billion, plans to raise nearly $300 million at “a 90 per cent markdown from the previous valuation”.

PharmEasy will see its valuation nosedive to about $500-$600 million.

The report claimed that PharmEasy is raising fresh funds to pay its lender Goldman Sachs from which it borrowed nearly $285 million last year as it took a majority stake in diagnostics solution provider Thyrocare for over $600 million.

Money Control reported on Wednesday that Manipal Group has expressed interest in investing approximately Rs 1,000 crore for an 18 per cent stake in API Holdings, the owner of online pharmacy PharmEasy and promoter of Thyrocare.

“Furthermore, existing investors of API Holdings are expected to contribute approximately Rs 1,500 crore in a funding round led by Manipal Group,” said the report.

PharmEasy, which has substantially reduced its workforce in recent months, was yet to comment on the reports.

Leading startup news portal Inc42 earlier claimed that PharmEasy “has reduced its workforce by over 500 employees through resignations or layoffs since last year”.

“Former employees, some of whom have recently quit the company, allege that despite having five co-founders, PharmEasy has serious leadership gaps, adding to the chaos,” the report added.

In June 2021, API Holdings acquired automated accredited diagnostic laboratory Thyrocare Technologies. The company signed definitive documents to acquire 66.1 per cent stake in Thyrocare Technologies Ltd (Thyrocare) from Dr A. Velumani and affiliates at a price of Rs 1,300 per share aggregating to Rs 4,546 crore.

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