Monthly Archives: October 2019

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  • Growth stage funding boom is due to new investors in this space rather than broad-based funds, say investors
  • The funding boom comes in the face of a macroeconomic slowdown in India, and an internet funding slowdown in China and the US

Mumbai: Startups breach investments crossed the billion-dollar mark in the September quarter and hit a four-quarter high, driven by a handful of investors deploying capital more aggressively than ever, data indicates.

Series B and C rounds, generally defined as the growth stage for startups, saw $1.13 billion in funding in the September quarter, more than double the capital raised two quarters ago, and 33% more than the $848 million raised last quarter, according to Venture Intelligence, a startup data tracker.

According to investors, the growth stage funding boom is due to a number of new dedicated investors in this space, rather than broad-based funds, as well as existing investors, such as Tiger Global, Steadview Capital and Ribbit Capital becoming more aggressive this year, after a hiatus or selectively investing in the last few years.

Till about a few years back, the same set of venture capital (VC) funds would invest across multiple stages. As it has happened in other large venture markets, several Series B and C specific funds like A91, B Capital, Epiq, Fundamentum, Vertex, Avtaar, Iron Pillar etc have now emerged in India,” said Rahul Chowdhri, partner at Stellaris Venture Partners, an early stage investor.

“In addition, several Series A companies over the last couple of years have scaled very well which has attracted the attention of several global investors. Both these factors have led to an increase in B/C investments,” he added.

The growth stage boom has been one of 2019’s biggest funding themes.

Growth stage investments in Indian startups breached the billion-dollar mark in the first half of this year, Mint reported on 8 July. However, this time, funding crossed a billion dollars in a single quarter.

To be sure, despite more investors and capital coming in, the deal pipeline does not seem to have broadened, with only 40-45 growth deals in each of the last eight quarters, the data indicates. This is in contrast with the general expectation that as the ecosystem matures, more founders and companies will come in.

(Graphic: Paras Jain/Mint)
“(I am) surprised that the number of investments is the same. The quality of entrepreneurs is vastly improved and while one can question valuations, even the biggest critics acknowledge that some high-quality and valuable businesses are being built leveraging technology. Which is why it is surprising that the opportunity pipeline has not widened. It should improve overall as a lot many ideas are now getting the initial funding and purchasing power continues to improve,” said Abhay Pandey, partner at A91 Partners, a growth investment firm.Pandey added that “three to four firms have been super-active over the last few quarters, causing a frenzy in parts of the growth market.”The funding boom comes in the face of a macroeconomic slowdown in India, and an internet funding slowdown in China and the US. These are beginning to make investors more watchful, as valuations rise with young companies raising hundreds of millions of dollars rapidly.“The capital from India-based funds has been stable. Strong flows from overseas over short periods cause the frenzy as we are witnessing today. With China certainly slowing and doubts emerging on valuations of a few large global companies, it is only a matter of time before the India sentiment gets sober,” Pandey said.

To be sure, investors continue to see the Indian market’s long-term value, with valuations being cyclical.

“Valuations are like stock prices; they go through their own cycles of highs and lows. As a long-term investor, we are more focused on value that the portfolio will build over the next decade. More late-stage investors mean Indian startups will have enough cash to scale up in the later stages of their evolution,” said Chowdhri of Stellaris.

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MUMBAI :  Lightbox leads Melorra! Yes, A giant Online jewellery brand Melorra said on Wednesday that it has raised $12 million in a Series C round led by existing investor, venture capital firm Lightbox Ventures.

  • Melorra raises $12 million in a Series C round led by existing investor Lightbox Ventures
  • Melorra also raises $2 million in debt from BlackSoil Capital

Other investors include the Burman family office, the private investment arm of the promoters of Dabur India, and the Jeejeebhoy family office.

Melorra also raised $2 million in debt from BlackSoil Capital, which provides debt to startups and other firms.

The company sells necklaces, bracelets, rings, and other jewellery items on its website and claims to deliver to 1,300 towns across the country. It caters to the affordable and daily wear jewellery segment, with an average transaction value of ₹20,000, founder and chief executive officer Saroja Yeramilli, said over the phone.

Melorra achieved gross revenue of about ₹55 crore last fiscal, which it expects to jump to ₹150 crore this fiscal through March, and ₹400 crore next year, Yeramilli said.

The jewellery startup segment, online and offline, has seen rising investor interest, driven by young users seeking affordable, better designed, and innovative products with rapidly changing trends. CaratLane, which counted Tiger Global Management among its investors, was acquired by Tata Group’s Titan Co. Ltd in 2016. Titan invested a further ₹100 crore in the venture this April to increase its stake.

Despite South Indian states such as Kerala and Tamil Nadu being famous for traditional jewellery and the largest buyers of gold, Melorra sees more user traction from the north and west, which adapt to changes and trends faster. However, Kerala is a fast-growing area for Melorra as well, Yeramalli said.

Among jewellery startups though, both BlueStone and CaratLane focus more on the high end, and more expensive items, as compared to Mellora, which wants to focus only on jewellery that costs less than ₹30,000.

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  • The cloud-based solution is an integrated system that enables users to ‘fyle’ an expense within Google G Suite and Microsoft Office 36
  • Fyle is also launching new first-of-its-kind WhatsApp integration to enable users to text an expense via WhatsApp

Fyle, a startup that provides expense management software, said on Thursday that it has raised $4.5 million led by US-based hedge fund Steadview Capital. Existing investors Tiger Global, Freshworks, and Pravega Ventures also participated in the round.

Bengaluru-based Fyle, which claims its revenue has grown 5x over the last five months has increased 5x plans to use the funds to invest in product innovation and expand its global market footprint with additional sales and marketing investments.

It is designed to serve small and mid-size enterprises – particularly ones with multi-country operations and distributed field teams. It says more than 300 companies in the US, India, Singapore, the EU, and the UK use Fyle currently.

The cloud-based solution is an integrated system that enables users to “fyle” an expense within

“We’ve created a customer-first culture and with this additional financial backing, we’ll be able to continue to execute on product innovation to deliver a truly automated process for expense management, saving precious time for employees and ensure continuous compliance for the company,” said Yash Madhusudhan, co-founder and CEO of Fyle.

Fyle last raised a Series A of $4.2 million in April this year led by Tiger Global, which has become the most active investor in software-as-a-service firms this year.

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  • Founded by Satyam Kumar and Vikas Kumar, the company received its NBFC license in July 2016
  • Including the current round, Loantap has raised a total of $25 million till date

Bengaluru: LoanTap Financial Technologies Pvt. Ltd, an online non-banking financial company (NBFC) has raised $12 million in Series B funding round led by Avaana Capital, along with participation from existing investors including 3one4 Capital, India Quotient, Shunwei Capital and Kae Capital.

LoanTap offers customized personal loans such as EMI free loan, rental deposit loan, holiday loan, and other differentiated offerings to white-collared salaried professionals. The company claims to have achieved profitability within just two years of launch.

Founded in May 2016 by Satyam Kumar and Vikas Kumar, the company received its NBFC license in July 2016. Including the current round, Loantap has raised a total of $25 million till date. It had last raised $8 million in January 2019, in a round led by 3one4 Capital.

“LoanTap is using the latest technology and has developed a robust underwriting process to build a high-quality portfolio. We believe that LoanTap is well-positioned to emerge as a lender of choice for millennials and middle India. Keeping customer cash flow needs at the center of product design provides more flexibility to the consumer while reducing risk,” added Anjali Bansal, founder of Avaana Capital.

Loantap competes with other white-collar workforce focused lending platforms such as EarlySalary, PaySense, Upwards, and other pay later apps like LazyPay and Simpl.