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Udaan is a B2B trading marketplace that has an aim of empowering retailers, wholesalers, traders, and manufacturers through the use of technology. Its network connects over 25,000 sellers to over 3 million B2B users in 900 cities.
It was founded in 2016 by former Flipkart employees – Amod Malviya, Vaibhav Gupta, and Sujeet Kumar.
Based on their business model, Udaan is an asset-light player and aims to help Indian SMEs with credit issues, B2B logistics, revenue, and marketing.
Udaan provides merchants on their platform with accounting, order, and payment processing solutions and provides retailers with affordable working capital (funds). In other words, Udaan is not only a forum for retailers and wholesalers, but it also underwrites small business loans.
Funding History
Earlier this month, B2B e-commerce platform Udaan had announced raising $280.5 million in its extended Series D round from new and existing investors.
Udaan has now raised $1.15 billion in total, including this new capital infusion. Udaan has surpassed $3 billion valuation as a result of this deal.
Existing Udaan investors Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent, as well as two new investors Octahedron Capital and Moonstone Capital, participated in the latest funding round.
Razorpay started with the objective of making online payments accessible to all companies whether big and small. Company offers a fast, affordable and secure way for merchants, schools, ecommerce and other companies to accept and disburse payments online.
With the new funds in hand, Razorpay has a wide range of goals that it has set out to achieve. The company is looking to expand its presence in South East Asian countries, scale up its business banking suite and also invest in acquiring new companies.
The company had recently acquired two startups – Opfin, a payroll and HR Management software company, and Thirdwatch, an Artificial Intelligence (AI) startup. It also plans to hire over 600 employees for the expansion plan.
Revenue and Valuation
Razorpay raised $160 million from Sequoia India and Singapore-based GIC in Series E funding round that has trebled the valuation of the payment gateway startup to $3 billion in less than six months.
Razorpay’s core business is payment gateway Company registered 2.6X jump in its revenues to Rs 509 crore in FY20. While it posted loss of Rs 6.15 crore during the same fiscal, it turned cash flow positive at the operational level during the fiscal.
Now Razorpay has become the 3rd most valued company in the fintech segment after Paytm and PhonePe.
Meesho operates as an online reselling platform that enables anyone to start a business without investment. It is a business platform trusted by more than 2.6 million resellers across India.
The company plans to deploy the fresh capital to help 100 million individuals and small businesses in the country to sell online.
Social commerce and business-to-business marketplaces have emerged as the potential sources of competition to e-commerce firms such as Amazon and Flipkart in India.
Social commerce is one prominent bet to take on modern e-commerce that has struggled to make inroads in India, despite billions of dollars ploughed by Amazon and Flipkart. Another bet is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities and villages in India. Global giants Facebook and Google are backing both the horses.
Funding in Meesho
The Series E funding round, led by SoftBank Group ‘ s Vision Fund 2, saw the valuation of the Bengaluru-based start-up rise to $2.1 billion from around $700 million in 2019. Existing investors Facebok Inc, Prosus Ventures, Shunwei Capital, Venture Highway and Knollwood Investment also participated in the latest investment round.
Meesho has raised a total of $515.2M in funding over 9 rounds by 25 investors out of which 12 were lead investors.
The online platfrom recorded a revenue of INR 341.6 Cr in FY20, ending March 31, 2020, representing a 4X spike from the INR 84.8 Cr revenue in 2019. In the same period, the company ‘ s expenses grew 3.5X to INR 657 Cr, leading to a loss of INR 315.4 Cr in the year, up from INR 100.42 Cr.
With the backing of the investors, it seems Meesho is riding on a high tide.
Swiggy is an on-demand food delivery platform, operating in over 500 cities that brings food from neighborhood restaurants directly to customers ‘ doors.
The fundraise has raised Swiggy’s valuation to more than $4.9 billion from its previous ascribed valuation of $3.6 billion in 2020.
The next 10-15 years offer a once-in-a-lifetime opportunity for companies like Swiggy as the Indian middle class expands and their target segment for convenience grows to 500M (million) users over the period.
Swiggy which has approximately 60% share in the foodtech industry raised this round funding only weeks after its arch rival Zomato raised $ 250 million in its latest funding round and plans to go public this year.
Funding in Swiggy
Swiggy has raised $800 million in its latest Series J round of financing with Falcon Edge Capital, Amansa Capital, Think Investments, Carmignac and Goldman Sachs joining as new investors. Sovereign wealth funds Qatar Investment Authority and GIC of Singapore were also part of the financing round
Swiggy has raised a total of $2.4B in funding over 13 rounds by 23 investors out of which 11 of them are the lead investors of Swiggy.
The company’s business grew by 85% in the fiscal year 2019-20 with the addition of 100000 restaurants and over 2 lakh delivery fleet.
Swiggy’s revenue grew 129% year-on-year (YoY) from INR 1,292 Cr in FY19. During the same period, Swiggy’s total expenses grew 88% YoY to INR 6,864 Cr. As a result, the company’s losses grew 66% from INR 2,362 Cr in FY19 to INR 3,909 Cr in FY20
Indian food-tech aggregators are attracting investor interest, given the rise in demand for home delivery of food following the Covid-19-led lockdowns. Indian food-tech aggregators secured the second-highest amount of funding from investors in the first two quarters of FY21.
A cumulative investment of over INR 12.5 trillion in vehicle production and charging infrastructure would be required until 2030 to meet India ’ s EV ambitions.
Inspite of 2020 being a rough year for businesses, a few EV startups saw a rise.
Euler Motors raised INR 200 Mn from Inventus Capital India as a part of its ongoing Series A funding.
Yulu, the micro-mobility service provider announced in 2020 that Rocketship VC invested ₹300 million in the company.
TVS Motors acquired a stake of 29.48% in the EV startup Ultraviolette through a funding of INR 300 Mn
Ather Energy was the biggest funding recipient among Indian EV companies in 2020, with two huge deals raking in a total of INR 3.423 billion.
There was a whopping $571 Mn investment in the healthtech industry in 2018 in India. Technologies like ML, robotic surgery, telemedicine, nanotech, IoT, AI, robotics, 3D printing are examples of a few technologies that have paramount importance in the healthcare industry.
The 2020 pandemic situation has provided a boost to rise of several healthtech startups.
There are about 3,225 healthtech startups in India. They focus mainly on the accessibility of healthcare resources because the ratio of medical specialists to patients is quite imbalanced in the country.
Indian healthtech startups exist in divisions of pharmacy, home healthcare, diagnostics & biotech
Investments in the Healthtech Industry
Healthcare has become the hotbed for investments in India.
The total investments in healthtech startups in India in FY 20 over 141 funding rounds was $600 Mn.
In FY 20, 53% of the angel investments were towards healthcare.
In FY20, the number of angel/seed investments were at their highest as compared to venture capital, private equity and public equity with 57% of the total angel investments going towards healthcare technology sector till date. Q2 2020 saw 9 angel/seed deals in healthtech as compared to 3 deals being carried out in Q1 (2020), an increase of 3X.
It is evident that the new-age health-tech startups will define the post Covid pandemic world.
What was the deal between Jaypee & UltraTech Cements?
The deal was worth a whopping 3800 Cr
UltraTech Cement Pvt Ltd. took over the debt of Jaypee Cement worth Rs. 3650 Cr and issued fresh equity worth 150 Cr. The deal transferred all the cement operations of JCCL in Gujarat which consisted of units at Kutch, Sevagram, Wanakbori and other western regions to UltraTech Cement. The Gujarat Plant of Jaypee Cement had a 57 MW coal-based power plant and 30 MW diesel generator. The valuation of the plant would be approximately Rs. 7936 a tonne.
Impact on Jaypee Cements
Jaypee carried a debt of Rs. 56000 Cr on its books. The banks under pressure from RBI to get rid of bad loans insisted on selling off assets to pay the debt. The deal reduced the debt by Rs. 3650 Cr and helped to maintain the liquidity and reliability of the company. However, it lost a unit which was generating substantial cash flow.
The shares of the company were valued at just Rs. 6.73 and were getting traded as stocks. After the transaction the price of the shares rose to Rs 43.40
The deal reduced the capacity of Jaypee Cements to 33 Million Tonnes but it still continued to operate as the third largest producer of cement in the country.
Impact on UltraTech Cement
Ultra Tech greatly benefitted from the deal. Acquiring Jaypee’s units gave UltraTech a presence in the central and western regions where it lacked presence. Gujarat was strategically well-positioned too from an export point of view for UltraTech to explore new markets.
The deal helped UltraTech to establish itself as a market leader again. Its capacity, with the addition of 4. MTPA, to 59 MTPA. The market share of UltraTech increased from 17% to 21% as it was able to create synergies between its existing plant in Saurashtra and Jaypee ‘ s plant which was embedded with latest technology and could generate immediate cash flows.
What will Big Basket gain through the deal with Tata?
Big Basket has the largest market share in the Indian Online Grocery Shopping Business. It saw a tremendous rise in its number of customer in the Covid period.
With the entry of Jio Mart, the market has turned hyper competitive due to the strong backing of Reliance following the strategy of deep discounts. Jio Mart started catching upto Big Basket within a few months of its launch.
Big Basket in an effort to maintain its position of the market leader and to backfire at Reliance Industries Pvt Ltd. has sought this deal with Tata.
The deal will bring Big Basket the deep pockets of the Tata’s, experience in scaling up business and the industry name.
What’ s in it for Tata?
Tata’s will gain a majority share in India’s online grocery business thereby increasing their digital presence as the conglomerate is sensing a high growth in the e-commerce industry post Covid scenario.
The deal will help the launch of their “Super-app” which will give the consumers a single point of access for all services such as online fashion, groceries, medicines etc and bring all their consumer businesses under one roof for which the company is also planning to acquire stakes in the online pharmacy business 1mg.
Tata will be acquiring existing shares. This will lead to an exit of Alibaba which has backed the start-up through many rounds of funding and Abiraaj Group, both of which are the major stakeholders along with partail exit of some small stakeholders.
Soonicorns are start-ups which have a potential to reach the $1Billion Club or the Unicorn Club. In most cases, they’ve receivedfunding either from a Venture Capitalist or an Angel Investor.
Soon to be a Unicorn
Start-ups are rapidly rising to become Unicorns andSoonicorns due to the boom in consumerism and increasedadaption of digital services and products.
A majority of these Soonicorns belong to the FintechIndustry credited to the deep penetration of digitization anddidgital payments.
These Soonicorns are mainly based out of Bengaluru- Theestart-up hub, Delhi and Mumbai.
Venture Capital firms like Accel Partners, Sequoia Capital &Tiger Global have backed a majority of the Soonicorns.
A cloud kitchen is a delivery-only restaurant that has no physical space for dine-in.
One of the most lucrative part of the segment is the need for low capital investment, which leads to better management of funds and the ability to launch more than one brand using the same kitchen infra.
Cloud kitchens are benefited mostly because they do not incur high overhead costs which general restaurants usually do and can have an option to build digital brand awareness with that extra funds.
Since lockdown, cloud kitchens in multiple countries have had the opportunity to grow their customer base and business and help customers embrace social distancing norms.
The challenges this segment faces is high competition, since rivals tend to provide better offers and discounts to achieve customer loyalty, which leads torequiring steady amount of funds to attract the market.
Cloud Kitchen Market
Currently there are more than 317 cloud kitchens in India which run over 2000 internet restaurant in 35 cities
An individual looking to venture into the cloud kitchen market usually would have to invest approximately 1/3rd the setup cost of a regular restaurant setup. The profit margin in such setups varies in the range of 10-15%
Market Advantages in the Cloud Kitchen Segment
Millennials these days are more fitness conscious and tend to follow the trend of ordering ‘healthy’ food due to various reasons. Companies take advantage of such niche markets and change their strategies accordingly.
With increasing number of food lovers in across the globe, people try experimenting with different cuisines, which in turn has led to the increase in exotic and specialty-based restaurants.
Industry Analysis
The cloud kitchen segment is expected to reach $71.4 billion by 2027.
With a rapid growing CAGR of 12% (2021-2027), this segment focuses to deliver and serve food with emphasis on quality of food and hygiene.
Food discovery apps are the biggest boon for the industry since they provide a teaser of the dining experience.
Contact less services has become one of the most focused upon feature a user/customer looks at before they make their decision to order online. Integration of mobile payment platforms and other technology advancements make it easy to achieve these services.
There are more than 3000 startups in the food service industry, out of which more than 146 startups have collectively received $268 million of funding.
