#ettech

IIoT startups are eyeing the rush to automate in the domestic market, Technology News, ETtech

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Avataar.me raises $7 million from Sequoia India, Technology News, ETtech

Avataar.me, a 3D and Augmented Reality software that helps enterprise customers create immersive shopping experiences for end-users, has raised $7 million from Sequoia Capital India.

Avataar’s technology aims to bridge the gap between offline and online experiences by replacing the current 2D visuals with life-size and hyper-realistic 3D extended reality/augmented reality experiences, according to the company.

Avataar brings spatial depth to the onscreen buying experience – delivering life-like photo-realism, mobile responsiveness, interactivity and personalization, it said.

The startup, founded in 2016 Prashanth Aluru, Sravanth Aluru, Gaurav Baid and Mayank Tiwari, spent four years developing their technology IP and launched commercially last year.

“AR/VR has shown strong emotional connect with GenZ and younger millennial consumers, a segment that brands have struggled to engage with in recent years and a segment that has far more spending power today than they did five years ago,” said Sravanth Aluru, CEO of Avataar.me.

There are over 10 US patents behind Avataar’s plug and play platform, and the fresh funds will be deployed towards research and development initiatives, it said.

“In 2019, more than 300 million users were actively using AR. Spends on AR tools for creating social engagement for brands along with ‘try-before-you-buy’ experiences is expected to grow 10X by 2023. Undoubtedly, the time for AR/VR is now, with ecommerce being one of the broadest applications,” said Shailesh Lakhani, managing director, Sequoia Capital India.

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Chargebee, Uni raise funds this week, Technology News, ETtech

A lot of startups raised funds in the last five days. The week also saw the parent entity of Walmart-owned fashion ecommerce portal Myntra infusing fresh capital into the company ahead of the festive season. Online retail giant Amazon too ploughed Rs 700 crore into its Indian digital payments business, Amazon Pay, as it plans to dole out large cashbacks in order to grow its customer base.

Myntra

Flipkart-owned fashion retailer Myntra has received a fresh capital infusion of $103 million from its Singapore-based parent entity – FK Myntra Holdings – ahead of its seven-day-long festive sale.

Why is it significant?

The investment comes just days before Myntra’s Big Fashion Festival sale that kicks off on October 16, during which it expects to double sales compared to the same period last year. Read More.

Amazon

US-based online retailer Amazon has pumped in a further Rs 700 crore into its Indian digital payments business Amazon Pay, ahead of the festive season when it expects to dole out large cashbacks in order to grow its customer base.

Why does it matter? The fresh funding also marks Amazon’s second investment into Amazon Pay this year, after the company pumped in Rs 1,355 crore in January. So far, the company has raised a little over Rs 5,000 crore since inception in 2016 and has been making a couple of investments each year. Read More.

Chargebee

Chargebee has landed Rs 403 crore ($55 million) in its Series F funding round, led by Insight Partners. The current round, the biggest so far by the subscription billing startup, comes at a time when brick and mortar companies are adopting subscription models in their businesses, following the Covid-19 pandemic. Read More.

Uni

Fintech startup Uni picked up $18.5 million (about Rs 136 crore) in seed funding — its largest in calendar year 2020 — from marquee venture capital firms Lightspeed Ventures India and Accel Partners India. The company, which is still in stealth mode, has been founded by Nitin Gupta, who was formerly a senior executive at Naspers-owned fintech major PayU India and at Ola Financial Services.

Why is it significant?

The large seed round marks the latest example of a second- or third-time entrepreneur raising substantial capital while still in stealth mode. Ashish Kashyap, founder and chief executive of IndWealth; Kunal Shah, CEO of Cred and Jitendra Gupta of new age banking startup Jupiter are three other examples of entrepreneurs that have raised $25 million and upwards for their latest ventures. Read More.

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PharmEasy in investment talks with Naspers, TPG, Technology News, ETtech

Illustration: Rahul Awasthi

South African technology and media conglomerate Naspers and US-based private equity firm TPG are in talks to invest up to $100 million each in Mumbai-based online pharmacy PharmEasy, three sources aware of the development said.

The proposed investment is likely to be done at a pre-money valuation $1.2 billion, the sources told ET.

The funding talks come less than a month after India’s competition watchdog approved a merger between PharmEasy and smaller rival Medlife, heralded as the first big consolidation play in a sector seeing heightened competition and entry of deep-pocketed players like Reliance Industries and Amazon.

ET was the first to report in August that the merger had been completed. A spokesperson for Naspers did not comment on the capital raising talks.

“It is the company’s policy to neither acknowledge nor deny its involvement in any merger, acquisition or divestiture activity, nor to comment on market rumours,” the spokesperson wrote in response to ET’s email.

PharmEasy did not respond to ET’s queries till the time of going to press.

PharmEasy received $100 million from Singapore’s Temasek in August last year, valuing it at $650-$700 million. It also wrapped up a $100-$120 million equity financing round in July last year, led by a host of new investors, including the second-largest Canadian pension fund CDPQ, and LGT – the private banking and asset management group controlled by the Liechtenstein princely family.

PharmEasy also counts venture capital firm Orios Venture Partners and Eight Roads as its early backers.

Graphic: Rahul Awasthi

That merger of PharmEasy and Medlife saw the latter sell 100% shares to API Holdings, the parent entity of PharmEasy, in return for 19.59% ownership in the combined entity, according to a filing with the Competition Commission of India (CCI), which ET had reviewed.

Top merchant bankers told ET that the broader pharmaceutical sector was expected to see a significant uptick in deal making.

“A lot of capital raising will happen in pharma. People will expand manufacturing capacities across the board. Entrepreneurs are getting more confident about their own businesses. This is a sector which has gone through a crisis of confidence…Whether that will happen through internal accruals, capital, it can be a combination of everything. It’s a big sector to watch out for… I would say this is the beginning phase for pharma again,” Gaurav Deepak, chief executive and co-founder of homegrown financial services giant Avendus Capital, told ET recently.

Online pharmacies such as PharmEasy and 1MG have registered growth outside their core metropolitan markets by rapidly expanding into tier-2 and tier-3 towns and cities, as they look to grab a larger slice of the Indian consumer wallet.

According to a recent report by RedSeer Consulting, India’s top four e-pharmacies, including Medlife, Netmeds, 1MG and PharmEasy contributed 90% to online drug sales.

The average order value has gone up to Rs 1,200 with customers ordering on average 10 times per year.

“Investors are looking beyond the discount-led model. They are looking at companies that have stabilised their supply chain and logistics infrastructure, while also developing their standing as market leaders, and are firmly focused on margins,” one of the sources cited earlier in the story said.

India’s eHealth market, led by the online pharmacy category, is pegged to touch $16 billion over the next five years, from its current market size of $1.2 billion, according to market watcher RedSeer Consulting.

The growth will be driven by a massive influx of customers availing online healthcare services, according to the report — Indian eHealth at a tipping point.

The number of households using eHealth services will grow to a projected 60 million by 2025 from 4.3 million today, it said.

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This organically trending YouTube ad shows the way, Technology News, ETtech

Illustration: Rahul Awasthi

A nearly five-minute advertisement has been trending on YouTube India over the last few days, in what is a rare occurrence on the video streaming platform.

India’s top YouTuber — Ajey Nagar aka CarryMinati – features in the satirical video endorsing lifestyle brand Arctic Fox’s gaming backpack.

It can be viewed on YouTube’s “Trending” tab that lists the most popular videos of the day across categories on the site for each country.

Conceptualised by creative agency Humour Me, the backpack ad video has fetched over 8 million views on the Google-owned platform since its roll-out on October 2 and is essentially one that liberally criticises all existing advertising tropes.

At a key moment in the ad, Nagar is seen speaking directly to the audience about how sick he is of brands making highfalutin claims – “without this bag, you are nothing” — in their commercials. “At the end of the day, it’s just a backpack. It’s decent at what it does but it won’t change your fortune,” he says.

In an environment where buying fake views and followers have become common practice across social media platforms, one may really question the significance of an ad trending on the platform on the back of views. To this, Dhruv Sachdeva, founder of Humour Me, pointed out that the video had fetched over 50,000 comments across platforms like YouTube, Instagram, Facebook and others, within two days of going live, especially . “Not even Nike gets that,” Sachdeva said, highlighting that engagement metrics like comments should be weighed more than the views to determine the success of a piece of content.

Arctic Fox has not spent on media to push the ad across digital platforms and plans to continue banking on its organic reach to drive sales, said founder Sridhar Thirunakara.

The company has witnessed a 5X jump in sales for the backpack since signing on CarryMinati as brand ambassador last week, he said.

Normally, Nagar garners “a similar number of views for both original content and branded content as long as the content rests on CarryMinati’s channel, since the audience is more proactive and focussed there,” said Deepak Char, his business manager.

This time around, however, the commercial uploaded on the brand’s channel is the one that is trending. “It is really exciting and I’m not sure if any Indian creator has witnessed this feat in the past,” Nagar told ET.

If a video is trending on YouTube, it gets even more views because, for unsuspecting users, the “Trending” section serves as an important source of content discovery on the platform, said Praanesh Bhuvaneswar, CEO of Qoruz, an influencer data analytics firm.

Branded content videos often trend on YouTube but not ones where an advertiser is selling its product outright.

In that sense, an ad trending on the platform is rare, said Pooja Jauhari, CEO of digital creative agency The Glitch, adding that Arctic Fox will likely earn significantly from it.

“It is culturally relevant, as it speaks authentically to the youth and the ever-growing gaming community in the country,” she added.

Having their video trending on YouTube is also an important KPI (key performance indicator) for most agencies, Jauhari said.

Getting an ad to trend organically on YouTube is a phenomenon that advertisers covet as it cannot be bought or gamed easily.

“At one point in the recent past, getting videos trended on YouTube was a service some agencies offered. YouTube started pulling down those videos and removing those brand channels, so advertisers are a lot more careful now,” said an influencer marketing professional who did not wish to be named.

According to YouTube’s fake engagement policy, “YouTube doesn’t allow anything that artificially increases the number of views, likes, comments, or other metric either through the use of automatic systems or by serving up videos to unsuspecting viewers. Additionally, content that solely exists to incentivise viewers for engagement (views, likes, comments, etc) is prohibited. Content and channels that don’t follow this policy may be terminated and removed from YouTube.”

Jauhari said the ad sets a benchmark for how influencer marketing should be done right as the video plays on influencer CarryMinati’s personality and reach as a gamer.

Nagar said he wrote all the dialogues himself and “changed the structure a bit, which gave more impact to the scenes …”

At one point in the ad, Nagar asks his manager if the client (referring to Thirunkara) has paid them yet before receiving his phone call.

Upon hearing that the money has not in fact come in, Nagar decides to massage the client’s ego by saying things like, “the bag is amazing. It can make a donkey look like a horse.” Switching off, he turns to the audience and says one has to do these things for the money.

Many brands might hesitate to give CarryMinati a free hand in bringing his tone of voice into their brand messaging, said Thirunakara of Arctic Fox, alluding to the gratuitous use of swear words in Nagar’s content.

“It was a high-risk we were taking as well, as that language doesn’t go well with our brand,” he added.

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New investors may bring $150 million to Zomato table, Technology News, ETtech

Illustration: Rahul Awasthi

A set of four new risk investors is expected to join the ongoing $600-million financing round at online food delivery company Zomato, two people in the know of the matter said, signalling continued interest in India’s internet story despite the Covid-19 crisis upending businesses across the board.

Hong Kong-based hedge fund Steadview Capital, South Korean Mirae Asset-Naver Asia Growth Fund, US hedge fund Luxor Capital and private equity firm Bow Wave Capital are likely to collectively pump $150 million into the company, these people said. UK’s Baillie Gifford, which had invested earlier in the round, will add more funds, a person familiar with the matter said.

Interestingly, Mirae backed Zomato’s closest competitor, Swiggy, earlier this year through another vehicle — Mirae Asset Capital Markets.

Public offer route

If these four new investors come through, Zomato would have racked up almost $575 million in all, as part of its latest fundraising efforts to fight the Naspers-backed Swiggy. Valuation for the current round has been pegged at $3 billion, as ET has reported earlier.

The Gurgaon-based company has also engaged with investment banks to kick off its initial public offering (IPO) process, sources told ET. Deepinder Goyal, cofounder and chief executive, Zomato, last month said the company was on course to go public by mid-2021.

“The investors joining the current fundraising are betting on the company tapping the public markets. While it is not being sold as a pre-IPO round, there is a clear path to an IPO that the company has drawn for itself,” said a person who is privy to the talks.

When contacted by ET, Goyal said in an emailed response, “We have no comments to offer on this.”

Illustration: Rahul Awasthi

Over the last two months, Zomato has racked up fresh funds from a group of non-Chinese investors, such as Tiger Global, Kora Capital and existing backer Temasek, amid a growing wave of anti-China sentiment in India. Alibaba affiliate Ant Financial remains a key shareholder in Zomato, with a 25% holding.

Earlier this year, Ant committed to investing $150 million, but Zomato has been able to access only $50 million so far, as India tweaked its foreign direct investment (FDI) rules in April. The new policy requires regulatory approval for any investment from a country that shares a land border with India.

Over a hundred investment applications — primarily from Chinese-origin investors — are on hold or being moved between various departments and ministries as the government continues to maintain strict curbs on capital inflow from Beijing and Hong Kong.

Even as India clamps down on Chinese capital, domestic internet companies have been shoring up funds from the US, Singapore and European investors. ET reported on September 29, that e-grocer BigBasket is in talks with Singapore government’s Temasek, US-based Generation Investment Management, Fidelity and Tybourne Capital, for a $350-400 million financing round.

Sectoral trend

For Zomato, specifically, what’s worked while attracting new investors is its focus on the food delivery sector, unlike Swiggy, which has diversified into grocery delivery and other adjacent categories, two investors said on the condition of anonymity.

What’s also helped the discovery and delivery app is that it’s been able to trim its monthly burn to less than $2 million and clawed back 85% order value and 70% order volumes from pre-Covid levels.

The online food delivery industry, primarily comprising Zomato and Swiggy, saw demand cratering during the initial months of the lockdown but has registered a rebound in sales and order volumes aided by the Indian Premier League cricket tournament and festive season.

New Post has been published on https://techcrunchapp.com/new-investors-may-bring-150-million-to-zomato-table-technology-news-ettech/

New investors may bring $150 million to Zomato table, Technology News, ETtech

Illustration: Rahul Awasthi

A set of four new risk investors is expected to join the ongoing $600-million financing round at online food delivery company Zomato, two people in the know of the matter said, signalling continued interest in India’s internet story despite the Covid-19 crisis upending businesses across the board.

Hong Kong-based hedge fund Steadview Capital, South Korean Mirae Asset-Naver Asia Growth Fund, US hedge fund Luxor Capital and private equity firm Bow Wave Capital are likely to collectively pump $150 million into the company, these people said. UK’s Baillie Gifford, which had invested earlier in the round, will add more funds, a person familiar with the matter said.

Interestingly, Mirae backed Zomato’s closest competitor, Swiggy, earlier this year through another vehicle — Mirae Asset Capital Markets.

Public offer route

If these four new investors come through, Zomato would have racked up almost $575 million in all, as part of its latest fundraising efforts to fight the Naspers-backed Swiggy. Valuation for the current round has been pegged at $3 billion, as ET has reported earlier.

The Gurgaon-based company has also engaged with investment banks to kick off its initial public offering (IPO) process, sources told ET. Deepinder Goyal, cofounder and chief executive, Zomato, last month said the company was on course to go public by mid-2021.

“The investors joining the current fundraising are betting on the company tapping the public markets. While it is not being sold as a pre-IPO round, there is a clear path to an IPO that the company has drawn for itself,” said a person who is privy to the talks.

When contacted by ET, Goyal said in an emailed response, “We have no comments to offer on this.”

Illustration: Rahul Awasthi

Over the last two months, Zomato has racked up fresh funds from a group of non-Chinese investors, such as Tiger Global, Kora Capital and existing backer Temasek, amid a growing wave of anti-China sentiment in India. Alibaba affiliate Ant Financial remains a key shareholder in Zomato, with a 25% holding.

Earlier this year, Ant committed to investing $150 million, but Zomato has been able to access only $50 million so far, as India tweaked its foreign direct investment (FDI) rules in April. The new policy requires regulatory approval for any investment from a country that shares a land border with India.

Over a hundred investment applications — primarily from Chinese-origin investors — are on hold or being moved between various departments and ministries as the government continues to maintain strict curbs on capital inflow from Beijing and Hong Kong.

Even as India clamps down on Chinese capital, domestic internet companies have been shoring up funds from the US, Singapore and European investors. ET reported on September 29, that e-grocer BigBasket is in talks with Singapore government’s Temasek, US-based Generation Investment Management, Fidelity and Tybourne Capital, for a $350-400 million financing round.

Sectoral trend

For Zomato, specifically, what’s worked while attracting new investors is its focus on the food delivery sector, unlike Swiggy, which has diversified into grocery delivery and other adjacent categories, two investors said on the condition of anonymity.

What’s also helped the discovery and delivery app is that it’s been able to trim its monthly burn to less than $2 million and clawed back 85% order value and 70% order volumes from pre-Covid levels.

The online food delivery industry, primarily comprising Zomato and Swiggy, saw demand cratering during the initial months of the lockdown but has registered a rebound in sales and order volumes aided by the Indian Premier League cricket tournament and festive season.

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Small businesses get the online edge, Technology News, ETtech

L-R: Shalini Girish, Amod Malviya, Adarsh Menon, Kapil Makhija, Ankur Pahwa, Gaurav Hinduja

Small and medium businesses (SMBs) across the country are increasingly looking to adopt digital technologies to remain relevant and grow amid the massive disruption caused by the Covid-19 crisis, according to panellists at The Economic Times -Back to Business Dialogues -Using Tech to leverage SMBs for India.

Leaders from companies such as Google, Flipkart, Udaan, Unicommerce, EY and Capital Float all concurred that while small businesses have been pushing to go digital for over a decade, it has vastly accelerated because of the pandemic.

These small businesses have embraced digital payments, use internet search to improve discoverability, sell across India using marketplaces, are consolidating their supply from fewer and more tech-enabled players, use technology to pay income and other taxes and are even leveraging their data for easier access to credit.

Ankur Pahwa, partner, ecommerce and consumer internet, at Ernst & Young, steered the conversation and captured views — categorised into four themes — from across the diverse set of panellists.

Evolution of SMBs

Far from managing inventory on multiple marketplaces and accepting payments digitally, SMBs shunned even basic technology tools at the start of the previous decade. However, that changed quickly with the proliferation of high-speed wireless internet, smartphone reach and knowledge of digital tools in the past five years.

“In 2016 or 2017, a large part of Indian SMBs didn’t get digital at all. Only 2% of SMBs then were using digital for really engaging with their customers and about 17% of them were using some tools for business; 68% of them had nothing online, not even email,” said Shalini Girish, director, customer solutions at Google India. Since then, Google has trained over 1 million SMBs in digital literacy, while its learning app Primer has been downloaded over 10 million times, Girish added.

The huge acceptance of digital tools by small businesses is not only because of education, but because of a realisation that not being digital puts them at a disadvantage. “Today, I think everybody understands the power of the internet. In terms of trying to convince businesses about how it can transform the way they do business, I think that point is already driven home strongly,” said Amod Malviya, cofounder of Udaan.

Diversifying supply chains

This shift of SMBs towards digital presents an opportunity in modernising supply chains that these businesses tap into. The pandemic has exposed many weaknesses in traditional supply, forcing businesses to demand more transparency, better cost and quicker turnaround times.

For Adarsh Menon, senior vice-president at Flipkart, this shift has presented a good opportunity to bring to businesses the conveniences that it brought to consumers a decade ago. “There is a big opportunity in fixing challenges that have crept up because of broken supply chains. In future, customers will lay emphasis on alternatives and ensuring business continuity, which has gotten impacted due to the crisis and hence digitally streamlining supply chain is a good opportunity,” Menon said.

Age-old models of purchasing are also getting disrupted, says Malviya of Udaan.

Retailers, who earlier bought stocks once or twice a month due to the tedious process of having to go to markets and locking up working capital in purchasing inventory, are today ordering smaller baskets but more frequently.

“What that does is it unlocks working capital for SMBs. Earlier, it was getting stuck in a few large purchases, now it is getting broken down into smaller purchases. This brings the wallet share on an online platform from 20-30% to 80-90%,” Malviya said.

Data for Finance

Selling online, accepting digital payments, and utilising digital tools to manage aspects of their business are also opening up avenues for SMBs to tap credit with new-age fintech players building more granular platforms.

For instance, according to Gaurav Hinduja, the CEO of Capital Float, when he started the fintech venture 6-7 years ago, it was hard to get an SME to apply for a loan online. “We would see only 5-10% SME who applied digitally, which is why we had to invest in a field force,” Hinduja said.

Things have, however, changed. “SMEs are so small, they don’t really maintain proper books or accounts. For us, the bank statements, GST, as well as partnerships with ecommerce players, these data points are holy grail,” he said.

Capital Float has been able to add 50,000 more SMEs as customers in the last six months. “The reason we have been able to do that is we are no longer giving larger lines…we have started giving loans of Rs 15,000- Rs 20,000, and seeing how that plays out for the next 6-10 months and take it from there,” Hinduja added.

Rise of new age brands

According to Kapil Makhija, CEO, Unicommerce, there has been a phenomenal increase in the adoption of technology by small businesses amid the pandemic.

This transition is even more stark in small towns. “At Unicommerce, we have seen an increase of 4x in enquiries, and many are coming from small towns. Our initial split was 30-70, where 30% used to come from tier-2 cities. Now, that has increased to 50-55% of enquiries,” said Makhija.