Techcircle.in – India startups, internet, mobile, e-commerce, software, online businesses, technology, venture capital, angel, seed funding http://techcircle.vccircle.com Covering Indian internet, mobile, software, SaaS, technology Tue, 21 Mar 2017 12:00:21 +0000 en-US hourly 1 https://wordpress.org/?v=4.5.3 http://techcircle.vccircle.com/wp-content/uploads/2016/06/cropped-favicon-infra-32x32.png Techcircle.in – India startups, internet, mobile, e-commerce, software, online businesses, technology, venture capital, angel, seed funding http://techcircle.vccircle.com 32 32 Enterprise payments firm Airpay secures Series A funding from Kalaari Capital, others http://techcircle.vccircle.com/2017/03/21/enterprise-payments-firm-airpay-secures-series-a-funding-from-kalaari-capital-others/ http://techcircle.vccircle.com/2017/03/21/enterprise-payments-firm-airpay-secures-series-a-funding-from-kalaari-capital-others/#respond Tue, 21 Mar 2017 12:00:21 +0000 http://techcircle.vccircle.com/?p=140019 Mumbai-based payment services startup Airpay has raised Rs 24 crore ($3.6 million) as part of a Series A round led by Kalaari Capital and existing investors Rakesh and Rajesh Jhunjhunwala. The company, operated by Airpay Payment Services Pvt. Ltd, will use the funds to build its technology, sales, distribution and support infrastructure to expand its […]]]>

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Mumbai-based payment services startup Airpay has raised Rs 24 crore ($3.6 million) as part of a Series A round led by Kalaari Capital and existing investors Rakesh and Rajesh Jhunjhunwala.

The company, operated by Airpay Payment Services Pvt. Ltd, will use the funds to build its technology, sales, distribution and support infrastructure to expand its enterprise customer base, it said in a statement.

Founded by Amit Kapoor, Kunal Jhunjhunwala and Rohan Deshpande in 2012, Airpay offers various payments services to medium and large enterprises. Its omni-channel platform provides enterprise software as a service (SaaS) solutions to its clients to accept inbound payments from consumers (C2B) and process outbound payments to pay vendors (B2B).

Customers can make payments across web, mobile, call centre, interactive voice response software, email, SMS and face-to-face. The company claims to offer real-time visibility of payment collection, advanced analytics and reporting of user payment data.

Several fintech companies have managed to gain investor attention in the past few months.

Bengaluru-based Chalk Farm Ventures Pvt. Ltd, which runs consumer lending startup ZestMoney, had raised $6.5 million (Rs 43.5 crore) in a Series A round of funding led by Naspers-owned online payments firm PayU.

In January, online payments gateway BillDesk had acquired a financial technology product from a Kochi-based company to increase capabilities in the mobile commerce segment.

Telecom major Bharti Airtel had acquired a strategic stake in Goa-based financial technology startup Seynse Technologies Pvt. Ltd. in February this year. In the same month, e-commerce firm Infibeam had entered into a pact to merge CCAvenue with itself in a deal that is expected to value the payment gateway firm at Rs 2,000 crore ($298 million).

At the same time, United Arab Emirates-based payments solutions provider OMA Emirates had acquired Mumbai-based payments firm MobiSwipe for an undisclosed sum, to broaden its overall portfolio in the Middle East, Eastern Europe and APAC regions.

Recent investments made by Kalaari Capital include a digital publication targeted at young women POPxo.com, a Delhi-based fintech startup Affordplan and e-commerce platform Snapdeal.

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Exclusive: Tiger Global may be part-exiting Flipkart with 3x return http://techcircle.vccircle.com/2017/03/21/exclusive-tiger-global-may-be-part-exiting-flipkart-with-3x-return/ http://techcircle.vccircle.com/2017/03/21/exclusive-tiger-global-may-be-part-exiting-flipkart-with-3x-return/#respond Tue, 21 Mar 2017 09:34:16 +0000 http://techcircle.vccircle.com/?p=140013 Tiger Global, the biggest investor in Flipkart, may have struck a deal with Microsoft and other new investors to sell a part of its stake in the e-commerce company in the latest fund-raising round that valued it at $9.3 billion pre-money, a person familiar with the conversations told VCCircle. While US online retailer eBay, Chinese […]]]>

For-Tiger-Global-Flipkart-Exit-Story-VC_Exit-Concept-GIF_Manni-02Tiger Global, the biggest investor in Flipkart, may have struck a deal with Microsoft and other new investors to sell a part of its stake in the e-commerce company in the latest fund-raising round that valued it at $9.3 billion pre-money, a person familiar with the conversations told VCCircle.

While US online retailer eBay, Chinese tech major Tencent and Microsoft are investing $500 million each in the round, the part-sale of Tiger’s shares would mean Flipkart is still short of the $1.5 billion it was targeting to raise in this round. That means either one of the three would put in additional money, or a fourth investor—potentially Google Capital—would help Flipkart close the round within a few weeks, added the person cited above.

Tiger Global did not immediately respond to queries from VCCircle. A Flipkart spokesperson denied any such development, calling it “completely false and baseless”.

Bloomberg and financial daily Business Standard reported on Monday that Flipkart has already raised $1 billion in the new round. Bloomberg said Flipkart was valued at $10 billion in this round, and was looking to raise an additional $1 billion. The financial daily said Flipkart was valued at $11 billion in this round and was in talks to raise an additional $500 million.

Various media reports in the past few weeks have said that Flipkart is in talks to raise around $1.5 billion from the likes of Microsoft, eBay and Tencent in a down round that will value the company at $10-12 billion. There have also been reports that the e-commerce company is in talks with other investors, such as PayPal and Google Capital. The fresh information coming from Flipkart circles indicate that the valuation could be a tad lower than earlier estimates.

Tiger’s strategy

The part-sale of its Flipkart stake aligns with Tiger Global’s strategy to book some gains before actively investing in the country again, VCCircle had reported earlier. It is part of its broader plans to monetise stakes in its major bets, such as Flipkart, Ola and Quikr, in the near term.

The secondary transaction of Flipkart shares between Tiger Global and Microsoft would result in the former’s stake in the company decreasing to around 25%, from the current 33-35%, depending on the deal size. This would also mean Tiger getting some of its money back—the firm is believed to have invested around $1 billion in Flipkart.

This part-exit would mean three-fold return for Tiger Global’s biggest investment in India, better than some of its poor exits such as Caratlane last year, where it practically made no gains at all. Except MakeMyTrip and JustDial, Tiger has seen no impressive exits in India yet.

For Microsoft, investing in an e-commerce firm would be a major strategic step as it will mark its sharpening focus on consumer internet. In fact, Microsoft has been diversifying its businesses on account of tough competition from Amazon in cloud computing. The software giant established its presence in the social media domain through the acquisition of professional network site LinkedIn last year.

For Flipkart, the fresh funding talks come nearly 19 months after the $700-million fund-raise at a peak valuation of $15.2 billion. Unsurprisingly, the upcoming round will be at a significantly lower valuation, following repeated markdowns by various US mutual fund houses that are minority shareholders in the company. Flipkart’s valuation by some of its minority investors over the past one year has ranged from $5.57 billion to $10 billion.

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Two Bangalore women give a ‘clean’ twist to co-working spaces http://techcircle.vccircle.com/2017/03/21/two-bangalore-women-give-a-clean-twist-to-co-working-spaces/ http://techcircle.vccircle.com/2017/03/21/two-bangalore-women-give-a-clean-twist-to-co-working-spaces/#respond Tue, 21 Mar 2017 07:40:47 +0000 http://techcircle.vccircle.com/?p=140007 Seema Sharath and Vasudha Veeranna

L to R: Seema Sharath and Vasudha Veeranna, Founders, Belakoo Co-create

Co-working spaces – the idea of an open and communicative work culture – is finally picking up in the Indian startup ecosystem.

The past two years have witnessed many startups, including Innov8, InstaOffice and 91springboard, venturing into this space to cash in on the opportunity. In fact, several of them have been able to secure a significant amount of funding.

However, most companies have been operating within city limits, providing efficient workspaces to entrepreneurs.

But two “like-minded” women entrepreneurs from Bangalore – Vasudha Veeranna and Seema Sharath – are all set to give a “fresh” twist to the co-working culture with their new venture, Belakoo Co-create. The startup aims to take creative entrepreneurs away from the chaos of city life to offer them a “co-create space”.

Taking shape
Sharath, the owner of a fitness studio Positive Fitness, had first met content and marketing professional Veeranna, who had worked with ad agencies such as Autumn Worldwide and Godot Media, to seek help for a branding and marketing campaign for her gym.

“During one casual conversation, we discussed if we could be out of this chaotic city and still be connected to work. That was when the idea of creating a unique co-working space hit us. We discussed with our friends and realised that this idea could both be feasible and sustainable as a business,” Veeranna told VCCircle.

Over the next 10 months, the duo started working on the nitty-gritty of their venture to come up with the concept of a clean thinking space outside the hustle and bustle of a city. Now, the first Belakoo Co-create facility is being set up in the middle of a 10-acre farmland, approximately 110 km from Bangalore.

“Many startup founders did not get a quiet-space to create something, and we had the answer to their woes,” she added. The startup aims to facilitate product thinking – ideation, prototyping, finishing products and solutions ­– at a place where they can check-in for two to three days to work on projects 24×7.

Once the duo firmed up the concept, they approached Shivananda Koteshwar, director at Taiwanese chip maker MediaTek. Soon, he agreed to put the initial investment of Rs 40 lakh in Belakoo Co-create. The funding has been used to set up the infrastructure.

“There are lot of co-working spaces that have mushroomed in Bangalore. Initially, these spaces had a lot of meaning because you co-work and engage. But one of the biggest challenges that I have seen is that it affects productivity and privacy of a startup team. They generally take longer and frequent intervals during work, because if one startup team takes a break others also follow,” said Koteshwar.

“Typically, the moment business teams check into resorts, the mindset is to unwind – you get to work, attend the conference and after 4 pm you are on your own and do not get to meet any of the members to take the discussions forward,” said Sharath, adding that Belakoo Co-create provides startup teams the platform to engage far more in an environment that enhances creativity. “It is a place where you can check in as a team and can work there literally 24×7. It is more like a bootcamp for startups,” she added.

First step
The first Belakoo Co-create facility – a 50-seater co-create space with high-speed net connectivity – is coming up in Malavalli in the first week of April. The green space, built around solar-powered energy, has a common meeting place, sit-out areas, tents and other facilities.

The founders have decided against setting up a kitchen because of hygiene and licensing issues, but will have ‘heat-and-eat’ system, where founders can pick and pay for food boxes. In addition, the startup is also planning to engage with nearby villages for food. “We are asking the villagers if they can help with arranging food. We want entrepreneurs to have a taste of local food,” Sharath added.

Besides, it is in talks to buy a 15-20-seater vehicle for pick and drop facility to ensure safety and security of startup teams.

Belakoo is currently in the process of creating the legal entity, and looking to raise more funds to set up three or four more hubs around Bangalore.

Business model
Belakoo Co-create will charge Rs 700 per person per night. And, if a person or team just wants to spend a day, the fee will be Rs 500 per person.

“We are also in talks with some agricultural IoT companies to take up permanent seat here. The biggest challenge with such startups is that they are not being able to experiment their solutions on the field. So, we are asking them to block a permanent seat here so that they can come in and go out anytime, and we can charge them on a monthly basis,” said Veeranna.

The founders are also willing to reach out to groups of college students, who wants to use Belakoo facilities as bootcamps during exams or competitive exams. For instance, they can have an instructor helping them prepare for competitive exams for a week. They are also thinking of running yoga classes during weekends as most startup teams prefer working on weekdays.

Belakoo is working on other revenue models, apart from membership.

Setting up the structure
Most builders have spare land in a 30-40 km range around Bangalore with a lot green spaces. The startup is talking to such builders to set up the co-create spaces.

Belakoo is working on three models to get the space for its facilities. One, a rental model, where they are working on long-term, that is, a minimum of 10-years lease agreement. Two, if the builder likes the idea and wants to invest in land and the building, it will agree to pay higher rent. And three, on a revenue-sharing model with the builder. “However, we want to restrict ourselves to the rental model,” said Veeranna.

Social outreach
To connect with local villagers, Belakoo will be inviting students from local government schools on the fourth Sunday of every month to organise science, crafts and language workshops. “We will organise 10 programmes for free and free meals will be distributed among students. This way it will help us connect with the villagers more effectively,” said Sharath.

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Bombay High Court bars taxi unions from disrupting Uber’s operations http://techcircle.vccircle.com/2017/03/21/bombay-high-court-issues-order-against-cab-unions-in-mumbai-strike-called-off/ http://techcircle.vccircle.com/2017/03/21/bombay-high-court-issues-order-against-cab-unions-in-mumbai-strike-called-off/#respond Tue, 21 Mar 2017 07:24:15 +0000 http://techcircle.vccircle.com/?p=140005 US-based Uber Technologies Inc’s India subsidiary Uber India Technologies Pvt. Ltd has obtained a restraining order from the Bombay High Court that prevents dissenting taxi union bodies from disrupting its operations in Mumbai. Mumbai’s taxi unions had threatened to go on strike on 21 March. However, the strike has been called off following the court […]]]>

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US-based Uber Technologies Inc’s India subsidiary Uber India Technologies Pvt. Ltd has obtained a restraining order from the Bombay High Court that prevents dissenting taxi union bodies from disrupting its operations in Mumbai.

Mumbai’s taxi unions had threatened to go on strike on 21 March. However, the strike has been called off following the court order, a spokesperson from Uber said, confirming the development.

“We welcome the court’s order and request the police to effectively enforce it. The cab unions have called off the strike and the cabs will ply as usual today. However, we have no information whether the unions are planning to hold strikes at a later date,” the spokesperson added in an email statement.

The order assumes significance in the light of the protracted standoff between cab drivers and aggregators Uber and Ola, over falling incomes and incentives. Between 10 March and 14 March, taxi drivers from Mumbai-based taxi unions Sangharsh Tourist Taxi Chalak Malak Sangh and Action Committee of Maharashtra stayed off the roads and prevented other taxi drivers from reporting to duty, a report in The Times of India said.

The major gripe of the drivers is the incentive policy – the variable remuneration linked to the number of trips clocked in a day. They say that the number of taxis plying on the roads has reduced demand which, in turn, has affected their earnings. Also, with fares falling to as low as Rs 6 per km and commissions increasingly getting bigger, drivers claim they are unable to get enough bookings to sustain their earlier levels of income.

Since 2016, Uber and Ola have been facing sporadic protests by their driver partners across the country, including in cities like Mysore, Guwahati, Bangalore, Kochi and Delhi-NCR. However, from January this year, the protests have snowballed into nation-wide dissent engulfing Delhi, Bangalore and Hyderabad. Delhi, Bangalore and Mumbai together account for nearly 60% of the overall business for both Uber and Ola, according to a report by the Hindustan Times citing estimates from RedSeer Management Consulting Pvt. Ltd.

Uber had obtained similar restraining orders from Delhi High Court and Karnataka High Court in February to prevent the unions from disrupting its operations.

In a blog post earlier this month, Uber India head Amit Jain said that the agitating section only represented minority interests. He also sought to dispel the aforementioned claims by saying that 80% of Uber drivers who are online merely six hours a day earn between Rs 1,500 and Rs 2,500 daily, after Uber’s service fee. This meant that the average Uber driver was earning more than the average software developer. However, drivers claim their monthly earnings have dwindled from Rs 70,000-80,000 to Rs 15,000-20,000.

Uber and Ola have also been battling additional legal petitions in the Bombay High Court by radio taxi operators that include Meru and Mega cabs, questioning the legality of their operations. The radio taxi operators claim that cab aggregators operate on a tourist vehicle permit, which cannot allow them to pick up and drop off passengers within a city, the report added. Besides, the app-based operators do not follow a fixed fare structure provided by the government, they claim.

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ShopClues looks to raise $75-100 mn in pre-IPO round http://techcircle.vccircle.com/2017/03/21/shopclues-looks-to-raise-75-100-mn-in-pre-ipo-round/ http://techcircle.vccircle.com/2017/03/21/shopclues-looks-to-raise-75-100-mn-in-pre-ipo-round/#respond Tue, 21 Mar 2017 06:42:29 +0000 http://techcircle.vccircle.com/?p=140002 Clues Network Pvt. Ltd, which runs e-commerce company ShopClues, is looking to raise $75-100 million (Rs 490-652 crore) in fresh funding even as it begins discussions with merchant banks for an initial public offering (IPO), a financial daily reported on Tuesday. The transaction is expected to be a mix of primary and secondary components, The […]]]>

ShopCluesClues Network Pvt. Ltd, which runs e-commerce company ShopClues, is looking to raise $75-100 million (Rs 490-652 crore) in fresh funding even as it begins discussions with merchant banks for an initial public offering (IPO), a financial daily reported on Tuesday.

The transaction is expected to be a mix of primary and secondary components, The Economic Times reported, without elaborating further.

The company has initiated talks with Credit Suisse and Goldman Sachs for the IPO, which is likely to take place in the first quarter of financial year 2018-19, the report further said. It added that the mandate for the IPO may be finalised over 3-4 months.

Emails sent to ShopClues didn’t immediately elicit a response.

ShopClues has so far raised an estimated $200 million from investors including Singapore sovereign wealth fund GIC, Tiger Global Management, Nexus Venture Partners and Helion Venture Partners.

In its last funding round, it entered the exclusive unicorn club, having surpassed a valuation of $1 billion. It raised an undisclosed amount in a Series E round led by GIC, with participation from existing investors Tiger Global and Nexus Venture.

The Gurgaon-based company, which claims to have clocked 100 million monthly visits on its website, has over five crore products and five lakh merchants.

In October last year, it  acquired two startups to enhance merchant support on its marketplace.

In July 2016, it had made its first acquisition when it bought payments firm Momoe in a part-cash, part-stock transaction.

In financial year ended March 2016, ShopClues’ standalone revenue more than doubled to Rs 179 crore while losses nearly quadrupled to Rs 381 crore.

ShopClues has been in the news of late with founder and former CEO Sandeep Aggarwal accusing his wife, co-founder and chief business officer Radhika Aggarwal, and co-founder and CEO Sanjay Sethi of thwarting his re-entry into the company and having an affair.

However, the company’s board has come out strongly in support of Radhika and Sethi, and accused Sandeep of engaging in personal vendetta.

“The company’s differentiated business model and capital efficient approach has enabled it to become a market leader and has grown 30 times under this management. It is very disappointing to see an ex-founder, who disassociated from the company for his criminal wrongdoings, is now engaged in a personal vendetta on a public forum,” said a statement from the board.

ShopClues started its Surety Programme last week, in addition to the ShopClues Buyer Protection programme that ensures an extensive, 5-point quality check of products using data analytics.

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Exclusive: GrabOnRent close to raising Series A round http://techcircle.vccircle.com/2017/03/20/exclusive-grabonrent-close-to-raising-series-a-round-from-new-existing-investors/ http://techcircle.vccircle.com/2017/03/20/exclusive-grabonrent-close-to-raising-series-a-round-from-new-existing-investors/#respond Mon, 20 Mar 2017 14:24:37 +0000 http://techcircle.vccircle.com/?p=139967 Bangalore-based GrabOnRent Internet Pvt. Ltd, which runs product rental marketplace GrabOnRent, is close to raising $3 million (Rs 19.5 crore) in Series A funding from new and existing investors, two persons familiar with the matter said. Existing investors IvyCap Ventures and Unicorn India Ventures will also participate in the round, the people cited above added. […]]]>
Shubham Jain, co-founder, GrabOnRent

Shubham Jain, co-founder, GrabOnRent

Bangalore-based GrabOnRent Internet Pvt. Ltd, which runs product rental marketplace GrabOnRent, is close to raising $3 million (Rs 19.5 crore) in Series A funding from new and existing investors, two persons familiar with the matter said.

Existing investors IvyCap Ventures and Unicorn India Ventures will also participate in the round, the people cited above added.

However, GrabOnRent’s co-founder Shubham Jain told VCCircle that the startup was aiming to raise $5 million (Rs 32.5 crore) if talks with new investors turn fruitful, and it will close the round by June 2017. He added that the startup will use the funds to expand the business to other cities, including Mumbai, Delhi-NCR, Pune and Chennai. GrabOnRent currently operates in Bangalore and Hyderabad.

An email sent to IvyCap Ventures seeking comments did not elicit a response immediately.

In June last year, GrabOnRent had raised a pre-Series A funding round led by IvyCap Ventures and Unicorn India Ventures.

On Friday, VCCircle had reported that IvyCap Ventures is in the last phase of its second fundraise.

GrabOnRent, which was launched in September 2015, connects rental suppliers across categories like furniture, appliances, cameras and so on with customers.

In February, a report by the Press Trust of India stated that GrabOnRent planned to raise $5 million in Series A funding.

IvyCap Ventures Advisors Pvt Ltd is an early-to-growth-stage venture capital firm which backs startups floated by alumni of top engineering and management institutions such as IITs and IIMs in the country.

In January this year, Mumbai-based RML AgTech Pvt. Ltd, which provides support services to farmers via mobile phones, had raised $4 million (Rs 27.2 crore) from existing investor IvyCap Ventures.

In March 2016, FTCash, a mobile payments platform for micro merchants in India, had raised $150,000 (around Rs 1 crore) in pre-Series A funding from the VC firm through the IvyCamp platform.

IvyCap Ventures has also backed firms such as Aujas Networks, FieldEz Solutions, Vinculum, E-Shakti, Leixir Labs, Purplle.com, Sokrati, Bluestone and Clovia, among others.

Unicorn India Ventures was founded by Anil Joshi and Bhaskar Majumdar in 2015. Prior to launching this fund, Joshi was heading operations at Mumbai Angels and Bangalore Angels. He has also held several portfolios at companies including Century Rayon, BK Birla Group Company and Transasia Biomedical Ltd and headed new projects and investments in startups with telecom, IT and energy-focused Artheon Group.

In July last year, Bengaluru-based Edunetwork Pvt. Ltd, which operates home appliances and furniture rental marketplace RentoMojo, had raised about Rs 33.5 crore ($5 million) from existing investors including Accel Partners and IDG Ventures India.

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Flipkart raises $1 bn in down round: Report http://techcircle.vccircle.com/2017/03/20/flipkart-raises-1-bn-in-down-round-report/ http://techcircle.vccircle.com/2017/03/20/flipkart-raises-1-bn-in-down-round-report/#respond Mon, 20 Mar 2017 13:49:45 +0000 http://techcircle.vccircle.com/?p=139991 Flipkart Pvt Ltd, the Singapore-based holding company of India’s largest e-commerce marketplace, has reportedly raised $1 billion in a massive fundraising round. The funds were secured at a down round that valued the company at $10 billion, the report added citing the same people. Flipkart had a peak valuation of $15 billion in 2015. The […]]]>

VCCircle_Flipkart8Flipkart Pvt Ltd, the Singapore-based holding company of India’s largest e-commerce marketplace, has reportedly raised $1 billion in a massive fundraising round.

The funds were secured at a down round that valued the company at $10 billion, the report added citing the same people.

Flipkart had a peak valuation of $15 billion in 2015. The investors in the current round included Microsoft, eBay and Tencent Holdings, the report said.

In an emailed response to VCCircle, a Flipkart spokesperson said, “As a company policy, we do not comment on market speculations.”

News about Flipkart’s imminent fundraising has been doing the rounds for a while now with various media platforms reporting it at various points in time.

In January, it was reported that Flipkart is likely to raise Rs 3,400-5,400 crore ($500-800 million) at a valuation of $10-12 billion.

Flipkart had a tumultuous 2016. The company struggled with exits of many top-level executives and a markdown in its valuation about a dozen times. A mutual fund managed by Fidelity Investments lowered the value of its investment in Flipkart by 36% to $5.56 billion. Morgan Stanley valued Flipkart at $5.57 billion in September 2016.

The latest valuation resetting comes on the heels of a major organisational restructuring in the second week of January when Flipkart appointed Kalyan Krishnamurthy, a former Tiger Global executive, as its new chief executive officer and made co-founder Binny Bansal group CEO.

The top-level shuffle, which comes exactly a year after Binny Bansal was made CEO, signals that the company is still striving to set the house in order even as it fights a tough battle against Amazon in online retailing.

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Tips to make the Startup culture a resounding success http://techcircle.vccircle.com/2017/03/20/tips-to-make-the-startup-culture-a-resounding-success/ http://techcircle.vccircle.com/2017/03/20/tips-to-make-the-startup-culture-a-resounding-success/#respond Mon, 20 Mar 2017 12:15:45 +0000 http://techcircle.vccircle.com/?p=139984 The startup culture that is slowly gaining momentum calls for adequate support at various levels to sustain itself. In the absence of the same, the enthusiasm may soon lose its vitality. It is necessary to make an assessment of the diverse support infrastructure that has to be erected to make the mission a thumping success. […]]]>

Tips to make the Startup culture a resounding successThe startup culture that is slowly gaining momentum calls for adequate support at various levels to sustain itself. In the absence of the same, the enthusiasm may soon lose its vitality. It is necessary to make an assessment of the diverse support infrastructure that has to be erected to make the mission a thumping success.

Concerted efforts at national level 

The National Investment Promotion Agency of DIPP, Invest India, needs to collaborate further with relevant agencies to offer aspirants clarity of purpose and confidence to persist despite challenging odds.

Development and delivering of cutting edge and insightful seminal programs by industry leaders, expert academicians, and corporate bigwigs would command the attention of people with potential in them but lack avenues to give vent to the same. Industry certifications for prolific investors would further fuel the growth.

Motivational assistance 

Tailored interaction sessions need to be progressively organised to make strong impressions in youth freshly graduating out of top institutions. Discerning market leaders would champion the case of startups in such sessions to inspire young minds to think differently. Real life success stories and resilience to tackle failures have to be articulated for entrepreneurs who have resolutely treaded the path and emerged successful by braving out the odds. Such motivation coupled with stepwise guidance to craft a failsafe business plan would prove to be life-changing for the bootstrapping generation. Discussion forums where information exchange takes place in an unrestrained manner among established and prospective entrepreneurs would develop faith in aspiring candidates.

Online support to be made available

Digital India theme is being touted enthusiastically and online platform can be used productively to engage thinkers. A robust learning space with modules gradually instilling the skills for making a bold statement of one’s novel ideas should be in place. The pedagogic channel should be accessible on the go. HD audio video media can be used to drive a better understanding of key concepts. The extent to which an individual has mastered the startup concepts can be evaluated through assignments involving strategy framing, decision making, team management, fund mobilisation and other issues to tackle real life business issues. Dashboards, wherein one can post questions and receive expert responses, would also sustain the interest in imbibing entrepreneurial concepts.

Clarity on legal issues 

Another hassle that discourages most would-be entrepreneurs from setting out on the path of innovation is legal conformance. There is lack of information at ground level in public domain about legal frameworks one has to ensure compliance to. Also, there is an alarming absence of discerning experts whom one can resort to for seeking guidance. This loophole has to be decisively plugged. It calls for identifying and assessing of innovative startup ideas at an erudite platform. Next, all resources required for building an unshakeable legal foundation have to be brought together under one roof for the optimal convenience of the one who is bootstrapping as well as to facilitate saving of time and energy.  Broad understanding of legal formalities in the process would also result in meticulous business planning.

Fundraising insights

Fundraising fundamentals need to be instilled in enthusiasts to empower them with insights and proven means to collect sufficient capital to fuel ventures. It is also important that one should develop a thorough understanding of the various incentives and sops offered by the government to stabilise startups. The significant budgetary announcements that can come handy for any nascent firm need to be communicated to innovators in a bold manner. This will serve to generate confidence in them and help them tread the dreaded path. Income tax exemption for three years in the seven years period after hatching business is a real motivator. The relaxation in carrying forward losses by doing away with the stringent shareholding pattern norm would help owners introduce fresh blood to steer business’ course successfully. The tax burden has been reduced sufficiently by allowing promoters to carry forward the tax losses to be offset in coming years.

Idea assessment and market cornering tactics to be ingrained

Idea assessment is another important aspect that helps enthusiasts choose the most strategic business conducive to growth by utilising the prevailing potential of aniche market. Once the target market has been shortlisted, it is important to understand the expectations of the prospective consumers from various perspectives. The proprietor has to engage in thorough research to comprehend what distracts prospects, additional service benefits they have been seeking, what inspires them to unhesitatingly initiate a buying decision and more. The present competition and way to turn the market sentiments in one’s favour have to be mastered.

Offshore support 

It is also important that a forum is created which will invite foreign companies to mentor, train and financially empower startups whose promising ideas may fail to materialise owing to lack of adequate funds and intellectual support.

Act now, and register for the four-week FREE online learning & development program, a GOI led Startup India initiative, designed by Invest India and powered by UpGrad.

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Snapdeal strategy head Jason Kothari formally takes over at FreeCharge http://techcircle.vccircle.com/2017/03/20/former-housing-ceo-jason-kothari-takes-the-helm-at-freecharge/ http://techcircle.vccircle.com/2017/03/20/former-housing-ceo-jason-kothari-takes-the-helm-at-freecharge/#respond Mon, 20 Mar 2017 09:11:09 +0000 http://techcircle.vccircle.com/?p=139976 E-commerce firm Snapdeal, operated by Jasper Infotech Pvt. Ltd, has appointed Jason Kothari as chief executive officer of its mobile recharge platform FreeCharge. Kothari will also continue his key leadership role as chief strategy and investment officer at Snapdeal, the company said in a statement. He replaces Govind Rajan, who quit the digital wallet company […]]]>
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Jason Kothari, CEO, FreeCharge

E-commerce firm Snapdeal, operated by Jasper Infotech Pvt. Ltd, has appointed Jason Kothari as chief executive officer of its mobile recharge platform FreeCharge. Kothari will also continue his key leadership role as chief strategy and investment officer at Snapdeal, the company said in a statement.

He replaces Govind Rajan, who quit the digital wallet company a month ago for reasons unknown.

“Jason is a strong, strategic and versatile business leader and entrepreneur who has already been the CEO of two successful companies,” said Snapdeal chief executive Kunal Bahl.

Snapdeal also announced it was committing an additional investment of $20 million (Rs 131 crore) in FreeCharge.

Kothari’s appointment as FreeCharge’s CEO was not entirely unexpected. When Rajan resigned from his post last month, Snapdeal had said that Kotahri would be overseeing operations at the payments unit.

Prior to joining Snapdeal in January this year, Kothari led the turnaround of Softbank-backed online real estate company Housing. He was appointed to lead the firm in 2015, after the ouster of then CEO Rahul Yadav. After his appointment, he scaled back businesses, pruned the workforce and shut operations in many cities to keep the company afloat. Housing investors also explored its merger with a number of players, including Softbank-backed Snapdeal, before sealing the deal with PropTiger. The merged entity also raised $55 million in fresh funding from Real Estate Australia (REA) Group and SoftBank. Before that, he was CEO and vice chairman of character-based entertainment company Valiant Entertainment, where he led the successful acquisition out of bankruptcy and turnaround of the company.

The development comes at a time when Snapdeal, including FreeCharge, is struggling on many fronts. Over the past several months, FreeCharge has been in the news for its fundraising efforts. Snapdeal has been struggling to raise anywhere between $150 million and $200 million for the digital payments unit. The e-commerce firm acquired the mobile recharge platform in a $400-million stock-and-cash deal in 2015. Since the acquisition, Snapdeal has been looking to monetise its investment in FreeCharge to build a larger play in mobile commerce.

But Kothari’s past stints indicate that more than raising fresh funds for FreeCharge, the company might be looking to sell off the digital payments entity. In fact, VCCircle recently reported that Snapdeal has been working with several investment banks to sell FreeCharge at a valuation of $400-500 million.

News Corp, the largest investor in PropTiger, owns the parent of this website.

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After venture capital, startups taking ‘vendor capital’ for granted http://techcircle.vccircle.com/2017/03/20/after-venture-capital-startups-taking-vendor-capital-for-granted/ http://techcircle.vccircle.com/2017/03/20/after-venture-capital-startups-taking-vendor-capital-for-granted/#respond Mon, 20 Mar 2017 08:29:30 +0000 http://techcircle.vccircle.com/?p=139968 The bloodletting in the Indian startup ecosystem continues with hotel-booking app RoomsTonite shutting shop on the heels of the Stayzilla fiasco, which is still playing out in the media. I have previously said that the startup space in India is safe because of its self-correcting nature. However, I did not expect that startups that failed […]]]>

Anirudh-Damani_Artha-India-VenturesThe bloodletting in the Indian startup ecosystem continues with hotel-booking app RoomsTonite shutting shop on the heels of the Stayzilla fiasco, which is still playing out in the media. I have previously said that the startup space in India is safe because of its self-correcting nature. However, I did not expect that startups that failed to raise venture capital will start raising “vendor capital”.

What is vendor capital? It is the money that unsuspecting vendors, suppliers and professionals are owed for services that the startup has consumed, in order to provide its product or service to customers. There is a temporary float between consumption, billing and the payment due to the vendor. A startup that utilises this float for keeping its operations afloat (pun so not intended), with the knowledge that the business is in a death spiral, has raised “vendor capital”.

Startups like ZoRooms, AskMe and Stayzilla are among the many that can be classified as having raised vendor capital—when they went bust, they left in their path a host of companies that could not expand, pay their employees and, in some cases, even put two square meals on the table for their families.

I am particularly critical of companies that have raised millions of dollars in venture capital because they have people who are paid by the company (such as the CFO and his team) and by the investors (the analysts, associates, partners, internal/external auditors and independent valuers) to figure out how much time they have before they run out of money.

These well-qualified and well-paid individuals had to know that the company was running on fumes, and reinvesting the operational cash flows was going to lead to a situation where the company wouldn’t be able to meet its contractual obligations. That information is presented to the CEO or directly to the board, and a decision is taken on how to continue operations. If the founders and funders want us to believe otherwise, then the joke is on them!

As an angel investor and mentor, I have seen my fair share of startups go through tough times, pivot from the brink of disaster and even shut shop, but the entrepreneurs I have the highest regard for are those who devised a plan to: complete customer obligations; pay their employees; take care of vendor debts; and prepare for shutdown/turnaround.

What is interesting is that most of these founders were running startups that were either self-funded or angel-funded (i.e., they hadn’t raised inordinate amounts of venture capital), but were led and mentored by responsible business-owners and investors who understood what was at stake for those investors in the company who didn’t own equity capital (i.e., vendors, customers and employees). All this, when neither the bills ran into crores of rupees, nor the equity raised was in millions.

In fact, the moral compass of VC-driven companies was at full display when Stayzilla co-founder Yogendra Vasupal wrote in his Medium blog:

“I don’t personally owe anybody money and I am wondering how can they get confused on such a basic matter as this was a clear civil case. “

Or defended his non-payment by saying:

“I also pointed out that my company is also owed close to [Rs] 7 crore from various debtors, but I am not going around filing false criminal cases against them.”

I would like to tell Mr Vasupal that the founder/chief executive is, beyond doubt, responsible for the debts of his companies—to convince these vendors, you or a person under your direct instruction personally met them to gain their confidence. To take cover under the law in such a situation shows there is something seriously wrong that no amount of venture capital can fix. In fact, if Vasupal had sought repayment of the money owed to him with the same vigour as his social media outreach, this situation would not have occurred.

Those who are supporting Vasupal in this episode of moral turpitude should defend Mr Vijay Mallya as well—after all it wasn’t he who went bankrupt, Kingfisher Airlines did. So what if it took down its lenders and employees with it, and burnt a gaping hole in the pockets of the government. The law does not change whether the amount is a few crore rupees or a few thousand crores.

But what founders like Vasupal have done, besides burning vendor capital, is hurt vendors’ confidence in startups. They have made it infinitely more difficult for founders starting up today to gain the confidence of vendors, and convince them to extend services to them. They have made it difficult for startups to trust other startups and do business with them. They have made it difficult for employees to leave the security of their “secure” jobs with MNCs or Indian companies to risk their livelihood.

The long-drawn court proceedings and certain provisions in the law might protect such founders for the time being, but the hurt they have caused their vendors, and the startup community in general, will be felt for years to come. To those who support such founders, there is a quote from Ken Ham that best describes how I feel about this.

“If you destroy the foundations of anything, the structure will collapse. If you want to destroy any building, you are guaranteed early success if you destroy the foundations.”

We cannot build a Startup India campaign on the carcasses of old business that have been the foundation of our economy. And nor can such founders—who don’t know when their business will run out of money or how to collect on their debts, and don’t take personal responsibility for the destruction they’ve caused—be the guardians of this edifice.

The author is partner at early-stage VC firm Artha India Ventures

Note: Artha India Ventures’ investments include Hotels Around You, Roadhouse Hostels, Vista Rooms and OYO Rooms, companies that happened to be Stayzilla’s competitors 

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