Venture capital funding to financial tech startups halves in April-June in India

Aug 17, 2016 0

Kolkata– Amid a difficult climate for marketplace lenders and a drop in mega-round activity, investment to venture capital (VC) backed fintech startups fell 49 percent in April-June period, a report said on Wednesday.

VC investment in fintech (financial technology), however, remains strong in India.

The report – Pulse of Fintech published jointly by KPMG International and CB Insights — said that overall global investment in fintech companies across both venture-backed and non-venture-backed companies totalled US$9.4 billion in the April-June quarter (Q2).

In the period under review, VC-backed fintech companies raised US$2.5 billion across 195 deals, a 12 percent drop in deal volume compared to January-March period of 2016.

“Despite VC backed funding to fintech decreasing in Q2, overall fintech funding remains on track to surpass 2015 levels.

“Traditional financial institutions and banks of all sizes are realising that the opportunities associated with fintech are not about who has the deepest pockets – and so they are intensifying their innovation efforts,” said Ian Pollari, Global Co-Leader of Fintech, KPMG International.

“The decline in fintech financing and deals is in line with what we’re seeing in the broader venture environment for startups, as VCs as well as crossover investors are pushing back harder on profitability and business model concerns,” said Anand Sanwal, CEO of CB Insights.

In India, lending companies in the SME and P2P space attracted investments this quarter with Bengaluru and Mumbai bagging the top deals.

“We continue to see investment in key areas such as payments and mobile wallet as well as increased momentum in emerging areas like robo advisory,” said Neha Punater, Partner and Head of Fintech, KPMG in India.

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Messenger app Hike raises $175 million

Aug 16, 2016 0

New Delhi– Instant messenger app Hike on Tuesday announced that it raised financing of over 175 million led by Chinese company Tencent Holdings and Taiwanese electronic manufacturing company Foxconn Technology Group.

This has led to the value of the company amounting to close to around 1.4 billion, with existing investors Tiger, Bharti and SoftBank also participating in this round.

“Tencent and Foxconn both have pedigrees that speak for themselves and such investment shows the strong foundation on which Hike is being built. The new fund-raise is going to allow us to push Hike to greater heights and invest in areas that will be key to our long-term vision and success,” said Hike Founder and CEO Kavin Bharti Mittal at an event held here.

This is the fourth venture capital round and the biggest to date for Hike, taking the total investment to over more than 250 million.

The company said it will be investing the raised fund in improving the technology of the app as well as for better service.

Talking about end-to-end encryption, Mittal said they were planning to introduce it soon and were in talks with the government.

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WhatsApp co-founder invests in Indian firm to push ‘connected cars’

Jul 11, 2016 0

New Delhi– In a move to speed up the availability of internet-connected cars in India, WhatsApp Co-Founder Brian Acton with other global business leaders on Monday announced they will invest an undisclosed amount in Trak N Tell — a Gurgaon-based car tracking telematics solutions startup.

Founded in 2007, Trak N Tell is owned and operated by automotive telematics technology company Bits N Bytes Soft Pvt. Ltd.

“We are happy to see rising interest in the ‘connected cars’ space in India. This funding is indicative of the same and a global appreciation of our attempt to endorse the Make In India initiative,” said Pranshu Gupta, CEO of Trak N Tell, in a statement.

“We will launch a superior safety solution for individual car and bike owners in the country. Our aim is to offer an Indian version of connected cars that are available in Europe and North America,” he added.

Trak N Tell will deploy the raised funds towards product development and business expansion.

The company currently provides a GPS product that enables car owners and fleet owners to track their vehicles. It also allows for predictive engine failure, preventive maintenance notification, fuel monitoring system and more.

“Pranshu has extremely interesting plans for the Indian automotive market and I’m very excited to help him scale his business further as an investor. It is great to be part of Trak N Tell,” added Acton.

According to the global research firm IHS Automotive, 60 percent of all cars sold in the US (about 10 million) will be connected to the internet by 2017.

Globally, it is estimated that there are 23 million connected cars on the road today with projections for 152 million by 2020.(IANS)

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Funding dips in Indian e-commerce sector

Jul 5, 2016 0

Bengaluru–Fund raising in the Indian e-commerce sector declined 50 per cent in the April-June quarter over the same period of last fiscal, investment bank and securities firm Jefferies Group said on Tuesday.

“Private funding in the Indian e-commerce sector has declined 50 per cent on yearly and quarterly basis, confirming the downward trend over the months,” the American firm said in a report.

Barring leading hotel rooms’ aggregator Oyo, which raised $100-million in April, there were fewer large transactions, indicating a slowdown in private funding in the emerging sector.

Arya Sen

Arya Sen

Data shows fund raising declined sharply to $500 million in the quarter (Q1) under review from $1 billion in the like period over the last two fiscal years, Jefferies said.

Oyo raised its equity fund from SoftBank, GreenOaks Capital, Lightspeed Venture Partners and Sequoia Capital.

Observing that challenges were greater for larger firms looking for raising $100 million, Jefferies equity analyst Arya Sen said the revenue growth for Just Dial would be key for fund raising for start-ups and entrepreneurs.

“In response to the slowdown in funding, there has been a shift in focus to profitability by the larger e-tailers over the last 6-9 months from growth and general merchandise volume (GMV),” Sen recalled.

“Though most e-commerce firms are targeting to break even over the next 12-24 months by reducing discount, change in mix towards profitable categories and customers, change in strategy and loss of market share to the global e-tailer Amazon have slowed growth for many,” the report pointed out.

Funding into travel suggests that high burn will continue for MakeMytrip despite an overall slowdown in the category.

“Funding into travel space has remained strong with Goibigo, Oyo, Stayzilla and Fab Hotels raising money in the last five months,” the report noted.

Global multinational internet and media group Napsers is reported to have committed $250 million to Goibibo.

Jefferies expects 15 per cent revenue growth for Just Dial, with contribution from JD Omni, though its management indicated a gradual return to 20 percent revenue growth in this fiscal (FY 2017).

“Traction from JD will be key to look out for Just Dial guidance of 25,000 customers by this fiscal end and 10 per cent revenue growth contribution from Omni,” the report added. (IANS)

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Ratan Tata invests in chatbot

May 22, 2016 0

Kolkata–Ratan Tata, chairman emeritus of Tata Sons, has invested an undisclosed amount in niki.ai, an artificial intelligence-based chatbot, a company founded by four IIT-Kharagpur alumni.

It was founded in April 2015 by IIT Kharagpur alumni Sachin Jaiswal, Keshav Prawasi, Nitin Babel and Shishir Modi and has now grown to a 21-member team.

Ratan Tata

Ratan Tata

“niki.ai, an artificial intelligence (AI) based chatbot, announced that Ratan N. Tata, chairman emeritus of Tata Sons, has invested in the company along with Ronnie Screwvala’s Unilazer that did a follow-up round to their first seed investment,” IIT-Kgp said in a statement on Saturday.

niki.ai leverages the technology of natural language processing and machine learning to converse with the customers over a simple chat interface, and places their orders within seconds with the partner businesses, the statement said.

Currently, Niki chatbot offers bill payments, cab booking, recharge, food ordering, home services, cricket scores, with many more applications in the pipeline, the statement said. (IANS)

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Fitness app HealthifyMe raises $6 million in funding

May 10, 2016 0

Bengaluru– App-based health and fitness startup HealthifyMe on Tuesday announced receiving $6 million Series A funding from IDG Ventures India, Inventus Capital and Blume Ventures.

“With these funds we plan to impact five million users and tie up with over 500 corporate and healthcare partners,” said HealthifyMe CEO Tushar Vashisht.

HealthifyMe is a freely downloadable app which analyses a user’s food intake, weight, physical activity and hydration to suggest a healthy regimen for the user to stay healthy and fit.

“A user can take a picture of what he is eating and send it to HealthifyMe to know the amount of calories he is taking in and receive instructions from qualified trainers, nutritionists and yoga instructors to lose weight,” said Vashisht.

The funds will be used to further develop its digital coaching platform and accelerate growth in India.

“It is a $2 billion opportunity with a few hundreds of millions of people looking for fitness and health solutions,” he said.

VLCC, Talwalkars and unorganised gyms and fitness centres are currently catering to the fitness needs of people which can be digitised and taken online with a cloud-based mobile first and highly scalable solution like HealthifyMe, said Vashisht.

The app has devliered corporate wellness programmes to Philips, GE, Cognizant and Manipal Hospitals and also offers chargeable personalised coaching.

It syncs with wearable devices like Fitbit, Yufit and MiBand, among others.

Founded in 2012 by Tushar Vashisht, Sachin Shenoy and Mathew Cherian, Healthifyme is currently being used by 5,00,000 people being served by 100 coaches.

“With HealthifyMe we want to be that company in India for wellness what MakeMyTrip has done to travelling and Uber and Ola to cab service,” added Vashisht.

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Lenskart gets Rs.400 crore funding led by IFC

May 4, 2016 0

New Delhi– Eyewear e-tailer Lenskart on Wednesday said it has received Rs.400 crore Series D funding from a host of investors, led by IFC.

“IFC, a member of the World Bank Group, is investing Rs.171 crore in Indian eyewear company Lenskart to help the company expand access to high-quality and affordable eye-care products in tier-3, tier-4 cities,” said a statement from Lenskart.

IFC was the lead investor for the Rs.400 crore Series D investment round which also saw participation from TPG Growth, Adveq Management and IDG Ventures. In addition, Ratan Tata and Kris Gopalakrishnan (co-founder of Infosys) invested in their personal capacity as part of this round.

Avendus Capital was the exclusive financial advisor to this transaction.

“IFC is a long-term partner with global knowledge and a broad network of Internet, technology and healthcare clients, including in the eye care space. We appreciate IFC for their support to our vision of ‘Lenskart glasses in every home’,” said Peyush Bansal, founder and CEO of Lenskart.

“The Lenskart investment is a part of IFC’s Venture Capital group’s strategy to invest in innovative Internet, Healthcare and Technology companies across emerging markets,” said Pravan Malhotra, IFC’s co-lead for Global Internet Investments and lead for venture capital investments in South and Southeast Asia. (IANS)

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MobiKwik gets $50 million investment from strategic investors

May 3, 2016 0

New Delhi–Mobile payments network MobiKwik on Tuesday said it had received $50 million investment from Japan’s payment gateway GMO and semiconductor company Mediatek.

The latest round of funding will be used for rapid product innovation, ramping up the team and user growth, MobiKwik said in a statement here.

“We are very excited to live up to the investors’ expectations and raise the funding,” MobiKwik Founder and CEO Bipin Preet Singh said.

MobiKwik’s existing investors include Sequoia Capital and Treeline Asia.

MobiKwik’s GMV (gross merchandise value) has grown by 250 percent year on year for the last four years, the company said.

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$12.1 Billion in Venture Capital Deployed to Startup Ecosystem in First Quarter

Apr 19, 2016 0

WASHINGTON, DC – Venture capitalists invested $12.1 billion in 969 deals in the first quarter of 2016, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters.

Total venture dollars deployed to startup companies for the quarter remained flat and total deal count was down 5 percent, compared with the fourth quarter when $12.0 billion was invested in 1,021 deals. Compared with Q1 2015, dollars and deals are both down 11 percent. This is the ninth consecutive quarter of more than $10 billion in venture capital invested in a single quarter.

Bobby Franklin

Bobby Franklin

“Forecasting the year based on the first quarter is always difficult, but a few interesting trends stand out. While total venture investment activity didn’t jump out of the gate as quickly as last year, it was still a strong first quarter for venture activity compared to recent years,” said Bobby Franklin, President and CEO of NVCA. “Of the decline that we did experience, most of that can be attributed to nontraditional investors scaling back their investment activity and refocusing on their core businesses. After a string of strong quarters for fundraising, venture investors will continue to be busy putting risk capital to work by finding and funding innovative ideas and growing them into the next generation of great American companies.”

“The first quarter appears to tell us that investors still have faith in the venture ecosystem,” said Tom Ciccolella, US Venture Capital Market Leader at PwC. “However, the increase in expansion and later stage financing, combined with the drop in first-time financing, suggests a shift towards relatively mature startups.”

Top Deals

The top 10 deals accounted for 25 percent of total dollars invested in the first quarter, up from 18 percent of total venture capital deployed during the fourth quarter. Compared to the fourth quarter, the first quarter’s top 10 deals came from a diverse range of industries, though it also saw investments in categories not featured last quarter—Computers and Peripherals and Industrial/Energy.

Industry Analysis

The Software industry continues to receive the highest level of funding of all industries, receiving $5.1 billion going into 376 deals for the quarter, a 12 percent increase in dollars and a 5 percent decrease in deals versus the fourth quarter of 2015. Half of the top 10 megadeals (investments of $100m or more) were in the Software industry.

The Biotechnology industry received the second largest amount of venture capital for the quarter, with $1.8 billion going into 118 deals, representing an 11 percent increase in dollars and a 19 percent increase in deals, compared with the previous quarter. Investments in the Life Sciences sector (Biotechnology and Medical Devices combined) during the first quarter accounted for $2.3 billion going into 177 deals, staying flat in dollars and declining 3 percent in deals. Investments in Life Sciences companies accounted for 19 percent of all venture capital deployed to the startup ecosystem in the first quarter.

Media & Entertainment companies received the third largest amount of venture capital for the quarter with $930 million deployed across 109 deals. Notably, Computers and Peripherals companies received the fourth largest amount of venture capital for the quarter with $871 million deployed across 14 deals, a 477 percent increase in dollars compared to the fourth quarter. The second largest deal of the top 10 megadeals was within the Computers and Peripherals space.

Ten of the 17 MoneyTree industries remained flat or saw increases in dollars invested in the first quarter, including Telecommunications (157 percent increase), Electronics/Instrumentation (118 percent increase), and Business Products and Services (107 percent increase).

Venture capitalists invested $2.4 billion into 232 Internet-Specific companies during the first quarter of 2016, dropping 24 percent in dollars and 4 percent in deal count, compared with the fourth quarter of 2015 when $3.1 billion went into 242 deals. “Internet-Specific” is a discrete classification assigned to a company with a business model that is fundamentally dependent on the Internet, regardless of the company’s primary industry category.

Stage of Development

Dollars invested in Seed stage companies declined 10 percent during the first quarter, totaling $418 million in 62 deals and representing only 3 percent of all venture investment dollars for the quarter and 6 percent of all deals. Early stage investment declined 18 percent in dollars and 22 percent in deals with $4.2 billion going into 406 deals. Seed/Early stage deals accounted for 48 percent of total deal volume in the first quarter, compared with 57 percent in the prior quarter. The average Seed stage deal in the first quarter was $6.7 million, down from $8.2 million in the fourth quarter. The average Early stage deal in the first quarter was $10.3 million, up from $9.8 million in the prior quarter.

Expansion stage investment was up 25 percent in dollars and 9 percent in deals for the quarter, at $4.1 billion and 288, respectively, from the previous quarter. Expansion stage deals accounted for 30 percent of all venture deals in the first quarter. The average Expansion stage deal was $14.1 million, up from $12.3 million in the fourth quarter.

Investments in Later stage companies increased 10 percent to $3.5 billion going into 213 deals in the first quarter. Later stage deals accounted for 22 percent of total deal volume for the quarter and increased 20 percent in deals. The average Later stage deal in the first quarter was $16.3 million, down from $17.7 million in the prior quarter.

First-Time Financings

First-time financing (companies receiving venture capital for the first time) dollars decreased 31 percent to $1.7 billion in the first quarter as the number of deals declined by 16 percent to 297. First-time financings accounted for 14 percent of all dollars and 31 percent of all deals in the first quarter.

Of the companies receiving venture capital funding for the first time in the first quarter, Software companies captured the largest share, accounting for 39 percent of the dollars and 41 percent of the deals with $666 million going into 121 deals. First-time funding in the Life Sciences sector during the first quarter was down 29 percent in dollars and 37 percent in deals, dropping to $404 million going into 33 deals.

The average first-time deal in the first quarter was $5.7 million, down from $6.9 million in the prior quarter.

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Abraaj Group leads BigBasket’s $150 million fundraising

Mar 22, 2016 0

Bengaluru– Global private equity investment firm Abraaj Group on Tuesday led a $150 million fundraising drive by Indian E-commerce grocery startup BigBasket.

“We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies,” Abraaj Group Asia head Omar Lodhi in a statement.

“Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position,” he added.

In addition to the participation of existing investors Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital in the BigBasket’s latest fundraising, new investors, World Bank subsidiary International Finance Corporation (IFC) and Sands Capital also marked their entry.

“We intend to increase the reach of our just-launched one-hour express delivery service and also launch our marketplace for specialty stores in the coming months,” said BigBasker co-founder V.S. Sudhakar about the utilisation of the raised funds.

“The proceeds of this round of fundraising will be used to finance BigBasket’s growth through further penetration into existing markets, expansion into Tier II cities across India, scaling-up of its recently launched express delivery and specialty store business that caters to top-up and emergency purchases, and increasing the product range offered to customers,” he added.

Founded in 2011, the online grocery startup currently operates in eight metro and 10 tier two cities retailing over 19,000 products from a range of 1,000 brands which include fruits, vegetables, meat, beverages and personalAcare products.

For Abraaj Group, this is the third investment in E-commerce, after acquiring stakes in Turkish online retailer Hepsiburada and Dubai-based cab hailing app Careem.

After entering India in 2006, this is its latest move is the here, following investment in Hyderabad based Care Hospitals and a gigawatt scale renewable energy platform partnership with Aditya Birla Group.

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