Food delivery firm Zomato surges 65% in key India debut

Shares in Zomato, a Gurgaon-based food delivery company and first of India’s consumer tech startups to go public, closed up 64.7% in its debut day of trading in Mumbai, delivering a key insight into the appetite investors have for the world’s second largest internet market’s burgeoning startup ecosystem.

Zomato’s shares traded all day above the issue price of 76 Indian rupees ($1) and surged as high as 138.9 Indian rupees ($1.87). The 12-year-old firm ended day one of trading on BSE in Mumbai at 125.2 Indian rupees ($1.68), securing a market cap of $13.2 billion, up from about $5 billion valuation it had attained in private markets during the startup’s fundraise earlier this year.

The startup’s $1.3 billion initial public offering was 40 times subscribed last week.

Friday’s milestone of Zomato has equally been significant for the rest of the industry as startup founders and investors closely watched the performance. India’s Twitter timeline on Friday was flooded with well wishes and celebratory messages from industry colleagues.

Ashish Dave, India head of Mirae Asset, a backer of Zomato, said the listing and performance of Zomato today has delivered the missing piece of liquidity in Indian startup ecosystem.

“This validates that we can generate large IPOs, which then makes our startups more attractive for global LPs. It also gives Indian investors a chance to participate in the India tech journey rather than from watching it from sidelines,” he told TechCrunch, adding that retail investors of this generation will finally find a way to get in on the action with the brands they recognize and have grown with.

Zomato chief executive Deepinder Goyal was quick to reciprocate. In a blog post, Goyal wrote, “Today is a big day for us. A new Day Zero. But we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem. Jio’s prolific growth has set all of us up for unprecedented scale. Flipkart, Amazon, Ola, Uber, Paytm – have also over the years, collectively laid the railroads that are enabling companies like ours to build the India of the future.”

“They say it takes a village to raise a child, and we are no exception. Hundreds of people have selflessly played a part in making Zomato what it is today.”

Indian tech startups have raised a record amount of capital this year as some high-profile investors have doubled down in the South Asian market. Swiggy, Zomato’s chief rival in India, said earlier this week it had raised $1.25 billion from SoftBank’s Vision Fund 2 and Prosus among others at a valuation of $5.5 billion.

A handful of other firms are also preparing to publicly list within a few months. Financial services startups Paytm and MobiKwik filed for their initial public offerings earlier this month. Online insurance aggregator Policybazaar is expected to file its paperwork within a few weeks.

“I don’t know whether we will succeed or fail – we will surely, like always, give it our best. But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have, and build something way more incredible than what we can dream of,” wrote Goyal.

Khosla Ventures leads Even’s $5M seed to give India the kind of healthcare their insurance doesn’t

The global pandemic highlighted inefficiencies and inconsistencies in healthcare systems around the world. Even co-founders Mayank Banerjee, Matilde Giglio and Alessandro Ialongo say nowhere is this more evident than in India, especially after the COVID death toll reached 4 million this week.

The Bangalore-based company received a fresh cash infusion of $5 million in seed funding in a round led by Khosla Ventures, with participation from Founders Fund, Lachy Groom and a group of individuals including Palo Alto Networks CEO Nikesh Arora, CRED CEO Kunal Shah, Zerodha founder Nithin Kamath and DST Global partner Tom Stafford.

Even, a healthcare membership company, aims to cover what most insurance companies in the country don’t, including making going to a primary care doctor as easy and accessible as it is in other countries.

Banerjee grew up in India and said the country is similar to the United States in that it has government-run and private hospitals. Where the two differ is that private health insurance is a relatively new concept for India, he told TechCrunch. He estimates that less than 5% of people have it, and even though people are paying for the insurance, it mainly covers accidents and emergencies.

This means that routine primary care consultations, testings and scans outside of that are not covered. And, the policies are so confusing that many people don’t realize they are not covered until it is too late. That has led to people asking doctors to admit them into the hospital so their bills will be covered, Ialongo added.

Banerjee and Giglio were running another startup together when they began to see how complicated health insurance policies were. About 50 million Indians fall below the poverty line each year, and many become unable to pay their healthcare bills, Banerjee said.

They began researching the insurance industry and talking with hospital executives about claims. They found that one of the biggest issues was incentive misalignment — hospitals overcharged and overtreated patients. Instead, Even is taking a similar approach to Kaiser Permanente in that the company will act as a service provider, and therefore, can drive down the cost of care.

Even became operational in February and launched in June. It is gearing up to launch in the fourth quarter of this year with more than 5,000 people on the waitlist so far. Its health membership product will cost around $200 per year for a person aged 18 to 35 and covers everything: unlimited consultations with primary care doctors, diagnostics and scans. The membership will also follow as the person ages, Ialongo said.

The founders intend to use the new funding to build out their operational team, product and integration with hospitals. They are already working with 100 hospitals and secured a partnership with Narayana Hospital to deliver more than 2,000 COVID vaccinations so far, and more in a second round.

“It is going to take a while to scale,” Banerjee said. “For us, in theory, as we get better pricing, we will end up being cheaper than others. We have goals to cover the people the government cannot and find ways to reduce the statistics.”

 

India considering phased roll out of central bank digital currency

India’s central bank is considering launching a digital currency, according to a top executive, giving a clear indication of its intentions for the first time after previously stating that it was studying the idea.

T Rabi Sankar, the deputy governor of Reserve Bank of India, said at a conference today that the central bank is considering introducing the nation’s digital currency in a “phased” manner while legal changes are made to the South Asian nation’s foreign-exchange rules and IT laws.

The digital currency, which will be backed by sovereign, will lower the economy’s reliance on cash, enable cheaper and smoother international settlements, and protect people from the volatility of privacy cryptocurrencies, he said.

“Every idea has to wait for its time, and the time for CBDC [central bank digital currency] is near. We have carefully evaluated the risks,” he told an audience at a conference held by think-tank Vidhi Centre for Legal Policy.

Sankar said the central bank’s “endeavor is that as we move forward [with the plan],” so that India’s digital currency “can reiterate its leadership position in payment systems of the world.”

The top executive’s remarks follows European Central Bank saying last week that it will begin a 24-month “investigation phase” that, if successful, could lead to the creation of a digital euro by 2025.

Also last week, China’s central bank said its digital yuan trial had reached $5.3 billion in transaction value by the end of June.

“Central banks have increased their attention on digital currencies,” said Sankar. “CBDC will be in the arsenal of most if not all central banks in the world. A calibrated and nuanced approach will be considered at the drawing board as well as with stakeholder consultations,” he said, adding that the central bank has been exploring the benefits and risks of issuing a sovereign CBDC for “quite some time.”

“We have studied specific-purpose CBDCs proposed by different central banks around the world for wholesale and retail segments. The launch of a general-purpose CBDC for population scale is being considered, and RBI is working towards a phased introduction strategy and examining use cases with little or no disruption of India’s banking and monetary systems,” he said. “However, conducting pilots in wholesale and retail segments may be a possibility in near future.”

In his remarks, Sankar also hinted that the central bank hasn’t changed its stand on private cryptocurrencies such as bitcoin.

In 2018, an Indian government panel recommended banning all private cryptocurrencies and proposed up to 10 years of jail time for offenders. The panel also suggested the government to explore a digital version of the fiat currency and ways to implement it.

At the time, RBI said the move was necessary to curb “ring-fencing” of the country’s financial system. It had also argued that bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government.

“They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic,” Sankar said today.

The 2018 notice from the central bank sent a panic to several local startups and companies offering services to trade in cryptocurrency. Nearly all of them have either since closed shop, or pivoted to serve other markets.

This proposal was challenged by several exchanges and traders, who filed a lawsuit in the Supreme Court. The nation’s apex court ruled in their favor last year. This ruling was seen as “historic” but it has yet to impact the earlier circular on the policy level. In the meantime, the country has hinted that it plans to introduce a law to ban private cryptocurrencies.

In the agenda published on the lower house website earlier this year, a legislation sought to “prohibit all private cryptocurrencies in India,” but allow “for certain exceptions to promote the underlying technology [blockchain] of cryptocurrency and its uses.”

India considering phased roll out of central bank digital currency

India’s central bank is considering launching a digital currency, according to a top executive, giving a clear indication of its intentions for the first time after previously stating that it was studying the idea.

T Rabi Sankar, the deputy governor of Reserve Bank of India, said at a conference today that the central bank is considering introducing the nation’s digital currency in a “phased” manner while legal changes are made to the South Asian nation’s foreign-exchange rules and IT laws.

The digital currency, which will be backed by sovereign, will lower the economy’s reliance on cash, enable cheaper and smoother international settlements, and protect people from the volatility of privacy cryptocurrencies, he said.

“Every idea has to wait for its time, and the time for CBDC [central bank digital currency] is near. We have carefully evaluated the risks,” he told an audience at a conference held by think-tank Vidhi Centre for Legal Policy.

Sankar said the central bank’s “endeavor is that as we move forward [with the plan],” so that India’s digital currency “can reiterate its leadership position in payment systems of the world.”

The top executive’s remarks follows European Central Bank saying last week that it will begin a 24-month “investigation phase” that, if successful, could lead to the creation of a digital euro by 2025.

Also last week, China’s central bank said its digital yuan trial had reached $5.3 billion in transaction value by the end of June.

“Central banks have increased their attention on digital currencies,” said Sankar. “CBDC will be in the arsenal of most if not all central banks in the world. A calibrated and nuanced approach will be considered at the drawing board as well as with stakeholder consultations,” he said, adding that the central bank has been exploring the benefits and risks of issuing a sovereign CBDC for “quite some time.”

“We have studied specific-purpose CBDCs proposed by different central banks around the world for wholesale and retail segments. The launch of a general-purpose CBDC for population scale is being considered, and RBI is working towards a phased introduction strategy and examining use cases with little or no disruption of India’s banking and monetary systems,” he said. “However, conducting pilots in wholesale and retail segments may be a possibility in near future.”

In his remarks, Sankar also hinted that the central bank hasn’t changed its stand on private cryptocurrencies such as bitcoin.

In 2018, an Indian government panel recommended banning all private cryptocurrencies and proposed up to 10 years of jail time for offenders. The panel also suggested the government to explore a digital version of the fiat currency and ways to implement it.

At the time, RBI said the move was necessary to curb “ring-fencing” of the country’s financial system. It had also argued that bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government.

“They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic,” Sankar said today.

The 2018 notice from the central bank sent a panic to several local startups and companies offering services to trade in cryptocurrency. Nearly all of them have either since closed shop, or pivoted to serve other markets.

This proposal was challenged by several exchanges and traders, who filed a lawsuit in the Supreme Court. The nation’s apex court ruled in their favor last year. This ruling was seen as “historic” but it has yet to impact the earlier circular on the policy level. In the meantime, the country has hinted that it plans to introduce a law to ban private cryptocurrencies.

In the agenda published on the lower house website earlier this year, a legislation sought to “prohibit all private cryptocurrencies in India,” but allow “for certain exceptions to promote the underlying technology [blockchain] of cryptocurrency and its uses.”

India’s BlackBuck valued at $1 billion in $67 million fundraise

India’s trucking system has a big inefficiency problem that continues to drag the economy. BlackBuck, one of the handful of logistics startups that is trying to overhaul this system, has just raised a new financing round and attained the coveted unicorn status.

Tribe Capital, IFC Emerging Asia Fund and VEF led the $67 million Series E financing round in the six-year-old startup, valuing it at $1.02 billion, BlackBuck chief executive Rajesh Yabaji told TechCrunch in an interview earlier this week. BlackBuck is the 16th Indian startup to become a unicorn.

BlackBuck connects businesses with truck owners and freight operators. It has developed a simplified app for truck drivers in India, who are typically not very literate, to help them accept work and easily navigate to their destination using Google Maps. On the client side, businesses can fire up a similar app to place orders.

About 700,000 truckers and 1.2 million trucks in India today are connected to the platform, which sees over 15 million transactions each month. “India’s truckers did not go truly digital till 2019. Since then, the supply activity has gone up by 20 times. That is the transformation our business has undertaken,” he said.

This is a developing story. More to follow…

Byju’s acquires reading platform Epic for $500 million in US expansion push

Byju’s said on Wednesday it has acquired California-headquartered reading platform Epic for $500 million, the latest in a series of moves from India’s most valuable startup as it deepens its footprint in the U.S. market.

The deal involves both cash and stock and Epic founders — Kevin Donahue and Suren Markosian — will continue to run the business, they said in an interview with TechCrunch.

Epic operates an eponymous digital reading platform for kids aged 12 or younger. The platform, which has a presence across 90% of elementary schools in the U.S., has amassed over 2 million teachers and 50 million kids (up from 20 million last year).

Epic, which counts Evolution Media as an early backer, collects and analyzes real-time anonymized and aggregated data on how many children read a book, how deeply they engage with it and where their interest starts to wane. In a Netflix-esque move, the firm has also started to release several print versions of its own original titles.

TechCrunch reported in March that Byju’s was in talks to acquire Epic. Donahue and Markosian are no strangers to Byju’s. They first met with Byju Raveendran, co-founder and chief executive of the eponymous Indian startup, four or five years ago, but conversations about an acquisition only began this year, they said.

Raveendran (pictured above) said in an interview that his son uses the app, which gave him the conviction to explore any opportunity with the startup more seriously.

“We started Epic about eight years ago with the goal of bringing books to every child. We thought through technology we can get kids excited about reading and we can remove any barrier between the child and book. We are now in almost every school in the U.S., reaching over 50 million kids and a billion books read,” said Markosian.

“It has been our personal passion to build this platform because we wanted our kids to read more, too. So when we got to this point, it really made sense for us to look at scaling globally and internationally. When we started to talk to Byju, we realized that we share a common passion for education and belief in technology helping solve this opportunity. Together with Byju, we can take Epic to the next level,” he said.

Some original titles released by Epic. Image Credits: Epic

U.S. expansion

For Byju’s, the new product expands its current portfolio and brings expertise about a demographic of the U.S. that the startup has been looking for, said Raveendran. The addition of Epic to Byju’s offerings is “complimentary from a product standpoint as reading is a very powerful format for students to learn,” he said.

“The distribution they have will also help us offer more options to students in the U.S. and reach a demographic that we have also been working to serve. They understand this demographic very well,” he said.

Earlier this year, Byju’s rebranded its international business as Byju’s Future School, as part of which it is offering coding and math in synchronous and asynchronous formats to students and plans to add music, English, fine arts and science to the catalog. Raveendran said he hasn’t decided whether Epic will be rebranded, acknowledging that the California-headquartered startup has a strong brand awareness in the U.S.

Byju’s, which launched a learning app featuring Disney characters in the U.S. earlier this month, now has three large offerings in the U.S. that Raveendran expects will generate $100 million each in revenue this year alone. “Our ambition is to make a global impact,” he said.

The startup plans to invest $1 billion in its North America business, he said. Byju’s, which also has a significant presence in China, plans to bring Epic’s offering to India and other markets, he added.

Acquisitions and fundraise

Epic is the latest in a series of acquisitions by Byju’s. In the past two years, the startup has acquired U.S.-based kids-focused “phygital” startup Osmo (for $120 million), online coding platform WhiteHat Jr (for $300 million), coaching centre chain Aakash (for nearly $1 billion), and Indian edtech startups Toppr* and Gradeup*. (*Yet to be officially confirmed.)

“We have not done acquisitions not for the sake of doing it,” said Raveendran, who himself is a teacher, pointing to the growth and success of firms he has acquired post-acquisition and how these firms have been led by their original founding teams. “Our aspiration is very long-term. We work with the founders to help them turbo-charge their growth,” he said, adding that the startup is open to exploring more M&A opportunities.

Byju’s, which has raised about $1.5 billion since the pandemic broke last year and has attracted several high-profile investors including Blackstone, said the fundraise in recent years has helped the startup to acquire younger firms. He said the startup currently doesn’t plan to raise more external capital, but he didn’t rule out more fundraises in the next few months.

YouTube acquires Indian social commerce startup Simsim

YouTube has acquired social commerce startup Simsim, the Google-owned firm said on Tuesday. Neither of the firms disclosed the terms of the deal, but two people with knowledge of the matter told TechCrunch the Indian startup was valued at over $70 million. Simsim founder didn’t respond to a text Monday evening (IST). Two-year-old Simsim had raised about $17 million and was last valued at $50.1 million.

 

Equity Monday: Zoom buys Five9 as Robinhood sets IPO price range

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

It was a big damn morning, so we had to cut some stuff. Here’s what we got into:

  • Stocks and cryptos are off this morning, as inflation and COVID-19 concerns rise.
  • Zoom is buying Five9. The deal is not super expensive, nor is it cheap. But given the huge percentage of Zoom’s market cap that it represents, it’s a serious wager from the video conferencing startup.
  • Carlyle is buying LiveU for around $400 million. TechCrunch broke this news. The deal shows that private equity interest in startups that aren’t unicorns.
  • Robinhood dropped a new SEC filing this morning! That means we have a price range and valuation target to play with. More from TechCrunch on the matter shortly.
  • From India: A huge round for Lenskart, and a big Series A for GlobalBees.
  • And we covered this round from Nigeria. A smaller transaction, but one that could prove to be quite neat, we reckon.

Ok! Chat Wednesday!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

India’s GlobalBees raises $150 million to build Thrasio-like house of brands

The universe of Indian firms attempting to replicate Thrasio’s success in the world’s second largest internet market just got bigger. Three-month-old GlobalBees said on Monday it has raised $150 million in a Series A financing round led by FirstCry.

Lightspeed Venture Partners also invested in the new financing round, which is $75 million in equity and $75 million in debt. Even with a $75 million equity raise, Monday’s announcement makes GlobalBees’ round the largest Series A funding in India.

Founded by Nitin Agarwal, formerly of Edelweiss Financial, and Supam Maheshwari, a founder of FirstCry, GlobalBees acquires and partners with digitally native brands across categories such as beauty, personal care, home and kitchen, food and nutrition, and sports and lifestyle with a revenue rate of $1 million to $20 million.

The startup then helps these firms scale and sell to marketplaces and through other channels in India and outside the South Asian market, Agarwal told TechCrunch in an interview. He said GlobalBees has already acquired or partnered with over a dozen brands and they are selling both in India and outside of the country.

“At FirstCry, we created a lot of brands and realized that most of these brands reach a scale after which it becomes too difficult to scale them,” he said. “Supam and I have been talking about this for several years, trying to find ways to disrupt this market. We think there’s an opportunity to create a new house of brands that is digital native.”

Agarwal said GlobalBees will attempt to build a distribution and enterprise ecosystem in the online space similar to how traditional firms have established those connections in the offline world. (Not all brands GlobalBees engages with will get acquired on day one, Agarwal said. Typically, some brands get acquired in a span of three years or so, he said.)

“The time it takes for D2C brands to go from 0 – 100Cr (about $13 million) in revenue has more than halved over the past few years,” said Harsha Kumar, Partner at Lightspeed Venture, in a statement.

“We believe that this creates a unique opportunity to create a brand house much faster as well. With their past entrepreneurial stints together and their experience in building one of the largest ecommerce platforms in India, the duo of Supam and Nitin is the perfect team to go after this idea. Lightspeed is thrilled to be part of this journey!” said Kumar, who is joining the board of GlobalBees.

Scores of startups in India today are trying to attempt to replicate what is popularly known as the Thrasio-model. Mensa Brands, a similar venture by former fashion e-commerce Myntra chief executive, recently raised $50 million in equity and debt. 10club, another similar startup, recently raised $40 million — though much of it is in debt. TechCrunch reported last month that UpScale, another prominent player in this space, is in advanced talks with Germany’s Razor Group to raise capital.

Like Thrasio, several of these firms are trying to acquire brands that sell midrange to high-end products in categories where competition is limited. In fact, some of the categories that are common among these brands are so underappreciated that even Amazon and other e-commerce firms have not explored them through their private label ecosystems.

GlobalBees’ Agarwal agreed with this assessment, though he added that not all brands are operating in niche categories.

New York-headquartered Thrasio, which has raised over $1.3 billion in equity and debt since December last year, had acquired or otherwise consolidated about 6,000 third-party sellers on Amazon as of earlier this year.

“India is at the cusp of a D2C revolution with an estimated market size of $200 billion in the next 5 years. Indian brands have shown great promise in the recent years, and we believe that GlobalBees is building great assets to accelerate the growth of digitally native brands in the country,” said Vikas Agnihotri, Operating Partner, SoftBank Investment Advisers, in a statement.

Agnihotri, alongside Atul Gupta of Premji Invest, Sudhir Sethi of Chiratae Ventures and Kshitij Sheth of Chrys Capital are also joining GlobalBees’ board.

This is a developing story. More to follow…

Blackstone acquires majority stake in Simplilearn for $250 million

Blackstone is acquiring a majority stake in Bangalore and San Francisco-headquartered edtech startup Simplilearn for $250 million.

Simplilearn operates an eponymous online bootcamp to help people learn data science, AI, machine learning, cloud computing and other skills that are in demand in the market.

The startup has partnerships with several universities and colleges including IIT Kanpur, Caltech, and Purdue University and students enrolling and completing these courses get a certificate from these institutes.

The 11-year-old startup, which runs 1,000 live classes each month, says it has helped over 2 million professionals and 2,000 companies including Facebook, Microsoft, Amazon across 150 countries.

The startup, which was last valued at $80 million in its 2016 Series C funding round, counts Brand Capital, Kalaari Capital, Helion Venture Partners, and Mayfield among its early backers. It had raised about $34.4 million prior to today’s deal, according to insight platform Tracxn.

Kalaari Capital, Helion Venture Partners and Mayfield Fund have taken exit as part of the new transaction but the leadership team of Simplilearn haven’t sold their stakes, according to a person familiar with the matter.

“The pandemic has only accelerated the need for digital skills and the industry has demonstrated absolute readiness for upskilling online. Hence, this is the most opportune time to take the next big leap in our journey to build the world’s largest digital skilling company,” said Krishna Kumar, founder and chief executive of Simplilearn, in a statement.

“We believe Blackstone can add significant value to our company because of their scale, commitment to building businesses, and global network, which will enable us to develop partnerships with businesses and universities as Simplilearn continues to expand around the world.”

The acquisition comes months after Blackstone-backed Aakash Education Services, which runs coaching centres across the country, was acquired by Byju’s — India’s most valuable startup — for nearly $1 billion. Blackstone has since also made an investment in Byju’s.

“This is Blackstone’s first private equity investment in Asia in a consumer technology company. […] We are excited to partner with Krishna Kumar and Simplilearn’s top-notch management team to accelerate growth and build the world’s pre-eminent digital learning company, and we expect this to be the first of many such investments in Asia,” said Amit Dixit, head of Asia for Blackstone, in a statement.