California-based Netobjex, a digital asset management platform have acquired Kerala-based blockchain solutions company Servntire Global Pvt. Ltd for an undisclosed amount on a cash & stock deal.
ServntireGlobal was co-founded by Mahesh Rajagopalan Nair, Mohan Raman, Tittu Varghese, Georgey Punnilethu Jacob and Sreeraj Sudhakaran in 2017. It is an IT startup that offers simple, efficient, cordial, end-to-end solutions to the enterprises and organisations that want to switch to blockchain technology.
Under this deal, both the companies will now develop blockchain based product offerings in multiple verticals like Manufacturing, Supply Chain, Smart Cities, Fintech and more.
According to the companies, the team’s experience will also span a wide variety of distributed ledger technologies including Ethereum, Hyperledger, Corda, Stellar, IOTA, NEM, BitShares etc.
This acquisition may prove to be a massive boost for players operating in niche space like blockchain, Internet of Things and Artificial Intelligence etc.
“We now have a very strong product offering that ties three key technologies (IoT, AI and Blockchain), and broad set of customer implementations of the platform across multiple domains and geographies. The next phase of our evolution would be to expand on this momentum,” CEO of NetObjex Raghu Bala said in a statement.
Earlier in May 2018, Aetlo Tech, a-year-old Indian blockchain startup was also acquired by Page Solutions, a global banking and financial firm based out of UK,
Recent Developments In Blockchain In India
In August 2018,The Reserve Bank of India (RBI) had formed a new research unit who is responsible for research and drafting rules and also supervise technologies such as blockchain and cryptocurrency.
Further, according to a report by Qrius, the US-based tech giant Microsoft had partnered with IT solutions provider Tech Mahindra to help curb spam calls in India. The solution is being built on the Microsoft Azure Platform and will also use the cloud services.
In August, Bengaluru-based Artificial intelligence (AI) and IoT-focussed venture fund pi Ventures has raised $6 Mn from CDC Group, which is the development finance institution of the UK Government.
Gurugram-based online restaurant discovery and food delivery platform Zomato has acquired Bengaluru-based startup TongueStun Food for about $18 Mn in a cash and stock deal.
TongueStun was founded by Manjunath Ramakrishnan in 2012. The startup works as an e-marketplace and has so far raised around $5 Mn funding from Unicorn Ventures, the early stage investing arm of investment bank o3 Capital and Haresh Chawlawho is a partner at private equity fund, True North.
In an email interaction with the Inc42 team, an official spokesperson of the Zomato team confirmed the deal.
Zomato plans to incorporate the capabilities of TongueStun app within Zomato app which will provide a high-frequency use case for the users. This will allow them to order food for pickup from their cafeterias using the Zomato app.
The company has also confirmed that post-acquisition, the TongueStun team would not change and the services will continue as is, in the same shape and form for all business partners.
“We see immense growth opportunity in the food@work (food at work) space, and with the help of TongueStun, we hope we’re able to delight our users at their workplaces as well. This market is very high frequency, and customers are very sticky as they end up placing more than 20 orders a month on the TongueStun platform,” the Zomato spokesperson said.
The acquisition of Tonguestun is the 12th acquisition deal for Zomato globally. Including the acquisition of TongueStun, so far Zomato has acquired four Indian startups which include Bengaluru-based Runnr, a B2B online service provider platform for hyperlocal logistics service, Delhi-based MapleGraph, and a tech-based logistics company Sparse Labs. Other global startup acquisitions by Zomato include NexTable, Mekanist, Urbanspoon, Cibando, LunchTime, Obedovat, Menu Mania and gastronauci.pl.
According to April 2017 report by Netscribes, the online food delivery market in India can be expected to grow by 34-36% over 2015 to 2020.
However the report also state that despite the popularity of online food ordering, market penetration at the time of publishing of the report was only around 0.7%.
In June 2018, online food delivery giants such as Swiggy, Zomato, UberEats, and FoodPanda, among other local players were in talks with government as they were facing challenges when the GST on restaurants was cut to 5% from 18% in November 2017 and the input tax credit (ITC) provision was withdrawn.
New Delhi-based financial services company IndianStartupFactory has received the final nod from market regulator SEBI, to launch its maiden venture capital fund worth $27.8 Mn (INR 200 Cr).
IndianStartupFactory was founded in 2016 majorly as supporter to startup mentoring and finances. It has now launched its maiden India fund, ISF Special Opportunity Fund. With this, the firm is looking to invest in startups at early and growth stage, SMEs and MSMEs (Micro, Small & Medium Enterprises).
Kapil Kaul, the founder of the ISF Special Opportunity Fund, confirmed the development to Inc42.
“The most important element which provides an edge to our fund is our method of due diligence, which will be inclined towards methods used by PE firms. But we will be investing on basis of venture capital fundamental,” he said.
Further, ISF will majorly be investing in startups where the operational profitability is already clear or the startup is looking forward to operational profitability within 12-18 months of investment.
Also, it is a sector agnostic fund. “We will definitely not be interested in real estate as of now, but we might take into consideration government approved infra projects,” added Kapil.
Here are some key details about the ISF Special Opportunity Fund:
The ticket size would be approximately $200 K to $3-4 Mn. This investment by the company can be both stage wise investment or in a one-time deal.
Looking to deploy the entire capital in less than two years
Will be investing in 15-20 startups
Looking to launch an incubation centric model to offer mentoring, guidance, business expert help and more
Have almost finalised term sheets to invest in three to five startups
Other notable startup funds launched this year were:
Mumbai-based early-stage VC firm Unicorn India Ventures had partnered with British counterpart Ascension Ventures to launch a cross-border evergreen fund named Unicorn Ascension EIS Fund which will support UK-based startups that are looking to enter the Indian market.
Inc42 DataLabs, in its H1 2018 funding report observed that fewer startups are being able to crack seed-stage funding deals. However, amid this dry run of funds, mature startups or the startups at growth stage have been able to take in big-ticket size fundings.
“The number of deals in H1 2018 increased by 15% compared to H2 2017. However, the funding amount fell by 40% compared to H2 2017 and by 18% compared to H1 2017,” mentions the Inc42 tech startup funding report H1 2018.
In such times, the growth of early stage investors who are looking for profit-oriented business models will certainly be a booster to the overall sentiment of the Indian startup ecosystem.
“Anything that can conceive of as a supply chain, blockchain can vastly improve its efficiency- it doesn’t matter if its people, numbers, data, money.” ~ Ginni Rometty, CEO IBM
Realising the future potential that blockchain may hold, numerous blockchain-based PoCs (proofs of concept) have been executed, validated, and presented across the country over the past two years. Telangana, Karnataka, Kerala, Maharashtra, and Andhra Pradesh are some Indian states that have been aggressively pushing the blockchain agenda, organising hackathons and conferences on the topic and implementing blockchain-focussed projects.
However, as the Karnataka Minister for Social Welfare Priyank Kharge (formerly IT/BT Minister)said on the sidelines of a blockchain conference, last year — “Blockchain is something that everybody is counting on, still we don’t know what will come out of it” — there is a series of roadblocks that are still blocking the road of blockchain development in the country.
In this context, Inc42 recently also published a comprehensive report — the Blockchain Technology Report India 2018 — which analyses the market potential and applications of blockchain in great detail along with demystifying the technology and elements associated with it.
Meanwhile, let’s take a look at the challenges and roadblocks in blockchain adoption in India.
Blockchain Can Be A Costly Affair
Switching to blockchain technology for any business or organisation isn’t easy. Its primary application — cryptocurrency — is undoubtedly a better and cheaper way of making payments than your regular fiat currency and self-executing contracts in smart contracts’ applications, this might not be true for all. While cryptocurrency has already been tested and adopted widely, many other blockchain applications are yet to be realised and executed. For instance, blockchain adoption in banking demands not only execution of PoCs but will require banks to hire blockchain experts and execute the PoCs at large scale.
And, hiring blockchain experts as well as data scientists is much costlier than hiring software developers.
Where Is The Money?
For corporates which usually prefer to adopt a long-term strategy, it could be easy and viable to adopt blockchain-based solutions developed by blockchain startups at their own expense. However, some of the biggest applications of blockchain lie in public frameworks such as Bitcoin and Ethereum, where numerous related parties can hop on the blockchain and make transactions, but the process involves expenditure on validation and maintenance of the blockchain.
In the case of Bitcoin, for instance, it is the mining that provides rewards to miners against the Proof-of-Work (PoW) that they do. Mining is an essential peer-to-peer computer process used to secure and verify Bitcoin transactions on the blockchain and miners play an essential role in blockchain maintenance work.
However, for other public blockchain-based applications, it’s still not clear who will bear the cost incurred in the maintenance of the entire network and the validation of transactions.
It’s Hard To Love Blockchain And Hate Crypto!
Unlike Japan, the US, Australia, and many other countries, India’s blockchain development has been caught in a Catch 22 situation where the central government and central banks want to promote blockchain projects but not cryptocurrencies, initial coin offerings (ICOs), and crypto-tokens.
In the last couple of years, cryptocurrencies and ICOs have become an essential means to raise funding. Besides serving as a payments method, cryptocurrencies also help execute PoW.
Similarly, ICOs help generate funding for blockchain startups. However, the Indian tax and banking authorities are not in a happy place with cryptocurrencies and ICOs. ‘
Hence, a number of blockchain projects initiated by startups could not be executed owing to the government’s hate affair with crypto and ICOs.
Inc42’s Blockchain Technology Report India 2018 explores some blockchain projects that were immensely successful owing to the same ICOs and cryptocurrencies that the Indian government is shunning.
Telangana, Andhra Pradesh, and some other states have joined hands with blockchain startups established abroad for implementation of blockchain in various fields, including e-governance, on a pilot project basis. This cites the lack of blockchain startups with the right skills in the country.
Right now, blockchain is one of the hottest expertise/skillsets to possess in the world. With the supply of resources skilled in blockchain being low and the demand high, Indian developers who want to work on or with the technology are gradually shifting abroad. A survey of over 100 developers conducted by blockchain community Incrypt revealed that more than 80% of the blockchain developers in India may move abroad in search of better opportunities due to the lack of a “robust regulatory framework” in the country on blockchain technology.
Further, leading institutes such as IITs are still in the process of offering blockchain-based courses. Hence, people are still dependent on various online/offline blockchain-based training programmes that are not able to meet the demand either in terms of quality or quantity.
You’re Ready To Adopt Blockchain, But Are The Others?
A blockchain is distributed ledger technology that digitally and chronlogically records transactions that take place between two parties. Even if banks, governments, and other organisations (educational institutes, hospitals etc), are ready to adopt blockchain for its various possible applications, it is important to know whether the other parties — vendors — know the technology well enough to trust in.
For instance, Inc42had earlier spoken to small supply chain players who extend their services to corporates and logistics companies. These small players, who lack an understanding of blockchain, were unwilling to adopt any new solution despite facing issues in their current payments system. This is largely due to lack of awareness on the potential of the technology.
Spreading awareness on blockchain is just one among many issues that the government, the blockchain community, and other stakeholders such as corporates and institutes will have to work on in order to pave way for blockchain-based solutions in India.
The Inc42Blockchain Technology Report India 2018 is an effort in exactly this direction — seeking as it does to decode blockchain for pros and n00bs alike.
While the Ministry of Electronics and Information Technology (MeitY) has invited public comments on the Draft Personal Data Protection Bill, 2018 (PDP Bill) latest by September 30, Inc42in association with Ikigai Law (Formerly TRA), on September 7, organised a roundtable interactive session with startups to the impact on their businesses, once the Bill gets enacted in parliament.
Moderated by Vaibhav Agrawal, founder and CEO, Inc42, Anirudh Rastogi, founder, Ikigai Law and Nehaa Chaudhari, Policy Lead at Ikigai Law addressed the key points of the Bill — data localisation, data criticality, notice and consent requirements and a host of other issues — the invite-only roundtable attended by startup founders, further put forward a host of challenges that have not been addressed or answered in the existing draft Bill.
Personal Data Protection Bill: Key Points
Data Collection
Be it offline or online, the data collection practices of startups will need to change. After the Bill gets enacted, the data fiduciaries (entities collecting or processing the data) will have to put their users on notice about the data that they seek to collect, the purpose of collection, whether the data will be transferred to third parties or outside the country, how it will be stored, for how long it will be retained and so on.
The draft thus makes the collection of personal data, limited and subject to notice and agreement. Startups will thus need to notify existing users of their data collection and use practices according to the new law and obtain fresh user consent. Startups expressed concerns that a bulk of their user base may not provide consent again and in the manner provided for, leading to a disruption in their business. This problem is amplified in India given that the average Indian user is not as tech-literate and may not provide granular consent, said Vivek Jain, CEO of InteractiveMedia.
The Bill primarily applies to “personal data” which is data that can be used to identify an individual. However, personal data is not limited to name and address etc, but it could be any data that could be combined with other data, even publicly available date, to somehow identify the individual. For instance, if a cab company knows that someone is going to a particular coffee shop on a daily basis, the data set could still be used to identify a unique individual and will constitute personal information, explained Anirudh from Ikigai Law.
While some of the startups were of the view that this could be one of the major hurdles for startups, some were even of the view that it does not prioritise ‘Right To Business’ like GDPR has done.
Data Localisation
For each and every data fiduciary directly or indirectly involved in the data collection or processing practices of Indian data principals, the draft Bill makes it essential to store at least a copy of the data principals’ on a server or data centre located in India. Further, certain data such as the critical one which will be defined by the government in conjugation with Data Protection Authority (DPA) will be stored only and only on India-based servers.
Thus, the data localisation has forced the data server operators to set up their server in India as well. However, during the roundtable discussion, the startup founders pointed out that opting data server in India is costlier than the data servers based in the US and Singapore, limits choices, imposes a higher administrative burden, and is detrimental from a data security standpoint. Others mentioned that various cloud-based services are today not available on Indian servers and will not necessarily be localised since the Indian market for many such services is tiny in comparison to the global market.
Therefore, the data localisation, consent notice and fulfilling further accountability to a user’s data such as entertaining right to access and right to be forgotten will not only increase the cost and thereby may reduce the profit margin but will adversely affect the startups’ operational-ability, efficiency and global competitiveness.
And, it won’t be only the PDP Bill, but multiple data-related laws which could be sectoral as well as country-specific data protection laws that one needs to be compliant of.
Sensitive Personal Data
The Bill has also invoked the concept of Sensitive Personal Data (SPD). The sensitive personal data goes on to include information such as of health data, official identifier — Aadhaar ID, Driving License etc — biometric data and more interestingly, religious or political beliefs, and caste-related data.
However, there is no clarity on whether critical data is a subset of SPD or not. The critical data is yet to be outlined by the government.
Taking Data Principals’ Consent
Following the GDPR way, the PDP Bill too has clearly defined that the information pertaining to seeking consent needs to be free, comprehensive, unambiguous and indicated through affirmative action. It is not advisable to offer pre-checked “I agree” boxes to users at the beginning of the privacy policy, but rather users should actively check the box appearing only at the end of the privacy policy so as to determine that they have at least scrolled down the policy to actually read it. It will be important for lawyers to work closely with product teams to find a balance between good data collection practices and user-experience, explained Anirudh.
Besides consent, the draft Bill has also given certain rights to the data principals which data fiduciaries will be bound to entertain within a given period of time frame. This includes Right To Access, Right To Be Forgotten etc.
PDP Bill: Challenges Ahead
The roundtable conference listed a number of challenges that remain ambiguous, unanswered and must be addressed before the Bill gets introduced in the parliament. Some of the challenges brought into account are:
In India, still, a significant amount of data is being handled offline, the PDP Bill doesn’t mention the mode of consent in offline data collection. How are the data fiduciaries supposed to send the notice of consent to the data principals while collecting their data?
Standards laid down under the Bill are loosely defined or not at all.
Collection of data for repetitive transactions or using new technologies such as IoT devices or facial recognition will become harder to implement, explained Nehaa.
Cross-border data sharing for research in areas such as drug efficacy, etc will be impacted.
Cost of compliance will shoot up significantly and specially burden startups
Compliance for startups aspiring to offer services globally is even more problematic since they will need to comply with different standards prescribed under different laws
Everyone’s mobile is filled with their contacts’ personal data, people do exchange business cards without specifically mentioning the purpose. How would the BIll affect such exercise in the future? What would happen if someone loses his or her mobile? Is he/she liable to litigation under the current draft Bill?
The Bill also outlines that only specific data pertaining to specific purposes to be defined by the Data Protection Authority can be collected. For startups, this could be a major hindrance. For example, a number of pilot projects are carried out where the purpose of the data collection remains agnostic in nature. The current draft Bill does not provide any clarity in such cases. And, if the Bill gets enacted in its current form, it might badly affect the disruptive technology advancements that are usually achieved through pilot projects.
How To Fix The Bug?
Culminated on a high where everyone was literally engrossed in the entire conversation, the Inc42 and Ikigai Law’s – The Dialogue observed a clear gap between the mindsets of policymakers and technology-driven startups. To keep up the momentum of the Indian startup ecosystem, the gap needs to be bridged. The dialogue must go on.
While many were of the view that data localisation being imposed under the draft Bill is primarily due to a particularly strong lobby backing the issue, the hefty penalties of up to Rs. 15 crores and criminal liability will hamper the business of startups at large.
The MeitY is open for the comments, feedback over the draft PDP Bill till September 30, 2018. Don’t forget to make your voice heard before it’s too late and becomes more difficult to fix the bugs!
Update 1: September 9, 2018, 21.46
The date for submissions for feedback on the draft Personal Data Protection Bill, 2018 has been extended to September 30, 2018.
In the early stage of a startup, an Angel is not just someone who puts in the initial cheque but also someone who spots the earliest of trends and becomes an early believer in a particular idea. As the startup grows, the role of an Angel diminishes and eventually lesser angels sit on the cap-table.
How is it that someone who trusted and helped the company grow from the very initial days become less important towards the growth stage of the company and what role do VCs play here?
Thus, we tried to understand from a VC how he feels the role of an Angel Investor is important in the time when we see more and more early-stage rounds being led by micro funds. Also, why it is in the interest of a company if its Angel investor moves on at some point in time.
Here are the excerpts of a discussion Shanti Mohan, CEO of LetsVenture had with VC Shailesh Lakhani at LetsIgnite Angel Summit. Shailesh Lakhani is a principal at Sequoia Capital and has been involved in the early stage ecosystem with Sequoia for the last 11 years.
Changing Startup Ecosystem
According to Shailesh, the role of startups in the economy has changed and there is more requirement and demand for early-stage funding and people try to organise themselves by forming small funds.
But Angel Investors can still add a lot of value, particularly when they come with sector expertise and have seen their own companies grow.
“The best vote of confidence here is Angel’s own money. And this shows that the person is really believing in that idea or that company and know in detail about the team behind the screens.”
Act Of Balancing During ‘Exit’
There needs to be a balance when an exit takes place. Some of the Angels want to stay on and some prefer getting out. Shailesh feels that the bottom line is that we should respect and be thankful to those who make money for you.
It could be an Angel Investor who has made money and now has give a part or even all of his/her holdings to enable the next round to happen. If an Angel Investor is thinking in the best interest of the company, things usually work out.
“So someone, when he is good to you, you need to show some reciprocity. When companies are raising rounds and some VCs are required to maintain ownership requirements, if a secondary enables that round to happen, we think its good for an Angel, who has made money, to sort of hub out of that company in that case.”
The Way Angel’s Role Diminishes
Shailesh mentions that with a formal board, advisors, many customers and employees, the role of the Angel diminishes gradually and it’s always best for the cap table to reflect the people who are actually contributing to the company today.
Angels are somebody who spot the earliest of the trends and VCs often see it a little bit later. It’s the best if an angel who has a particularly nuanced view of an industry can spot these early trends and invest in them.
Advice To Angels On Curating Startups
Shailesh offers three pieces of advice for the Angel investors when they are looking out for their next investment.
First, those, who particularly has a nuanced view of the industry, they can see a trend happening before others, that’s the best way for them to think about investing as usually we (VCs) see the trends a little bit later.
Second is when they find a great team. However, the team might be a little bit mistracted, and the Angel feels that over time it can figure things out.
Third is when there are a bunch of open questions and you are willing to take an opinion on those. As an Angel investor, you can do that with the relatively small amount of dollars.
This conversation took place at LetsIgnite Angel Summit organized by LetsVenture in Bengaluru on July 7, 2018. Shailesh Lakhani was a speaker at the conference along with other prominent speakers like Binny Bansal, Subrata Mitra, Amit Gupta, Dev Khare and Anand Lunia. Watch the whole conversation here!
Gurugram-based adventure and activities based experiences platform and community Togedr has raised an undisclosed amount of funding from a group of US & UK-based startups. The investment was led by UK-based investor Anil Patel whose expertise lies in cloud architecture and scale, said Togedr CEO and founder Ashish Yadav, in a recent interaction with Inc42.
The US-based digital and travel domain MAW Media and Nalini Singh who has expertise in APAC market expansion and digital marketing & partnerships from platforms like Facebook, Google and Microsoft also participated in this round of funding.
Founded in December 2016, Togedr curates adventure activities like trekking, camping, scuba diving, safari, and bungee jumping among others. It was also selected to be part of FBStart in January 2017, where the startup received $40K worth of credits and services from Facebook and its partners including UserTesting, Dropbox, and MailChimp.
The startup plans to use the latest round of funding for building better tech and APIs which can be shared with their partners, expand digital marketing, and have more people in operation site where they can bring more activities in the platform.
At the same time, the Togedr team is also aiming to launch international hikes and corporate activities in South East Asia market, as well asexpand its presence in Bengaluru and Goa.
“We got the core tech, digital marketing fundamentals and community principles right, solidified our B2B offerings to sustain our revenue stream and built the platform that can scale-up. Now we are looking to grow rapidly using the investment in product development,” said Ashish.
From A Community App To An Adventure Travel Platform
Ashish who comes from an army background conceptualised the idea of Togedr with a vision to build one single platform wherein one could connect with like-minded people based on the activities they are interested in.
The Togedr service was initially launched as an ‘app-first’ community to find an activity buddy in Delhi/NCR and book an activity through its app. The service lacks a monetisation model, however, the Fbstart programme proved to be a turning point for Ashish.
“We learnt the rules of community building, trust and organic growth from the masters of the art at Facebook.”
The result? Togedr have now taken down the app from both the stores (Android and iOS) to reintroduce it by this year end with better design elements and launched a mobile-friendly website and live chat using Facebook messenger API both of which unlocked user growth by 200% month-on-month.
As of today, 20% of their bookings come through Facebook direct messaging and Whatsapp for Business app. Also, the team personally ensure the quality of services listed on the platform. For instance, safety tests for trekking guides in Roopkund – which is a popular but difficult Indian trek, doing the test run of paramotoring partners in Gurugram.
The team of six is now looking to leverage the new tech stack (MERN Stack) for building open APIs to share with Togedr’s partners’ Hotel chains, Banks among others. It is also looking to grow out Affiliate network with bloggers and Instagram influencers, hiring the right team and finally- investing more in digital marketing on Google and Facebook to solidify its revenue stream further.
Togedr: Creating A Niche For Itself
Adventure tourism is one of the most popular segments of the tourism industry. Owing to India’s enormous geophysical diversity, it has progressed well over the years. As stated by IBEF in its annual tourism and hospitality report April 2018, the adventure has been considered as a part of India’s tourism policy, and almost every state has a definite programme to identify & promote adventure tourism.
According to a recent study by Jaipur-based adventure tourism platform (and one of the arch rivals of Togedr) Thrillophilia, the adventure tourism and activity travel market is estimated to grow at a CAGR of 17.4% from 2017 to 2023 in India. Further, in India, demand for activities and local experiences has grown by 178% over the past three years.
However, with the burgeoning opportunity comes the cut-throat competition, that too with biggies such as ClearTrip Local Experiences, Yatra Journeys, AirBnB Trips as well as the existing brigade of startups including some notable names such as Trippongo, TripSavvy, TravelTriangle, Expedia, Ebix-acquired Via.com, among others.
Ashish, however, believes that adventure as a business model and an industry is still emerging in India. People want to experience a new destination every weekend. However, even in urban India, the majority population is hustling in their day to day life and spending INR 4K to 13K on a weekend trip is still a challenge for many.
“We are aiming to make a dent in this niche by forming strategic partnerships with the service providers to ensure good customer experience at affordable costs,” he added.
Tourism: India Vs Southeast Asia
Overall, as per IBEF, the direct contribution of travel & tourism to India’s GDP is expected to reach $148.2 Bn by 2027, which is further attracting the investors globally to this segment, and enhancing partnerships and consolidations.
According to Inc42 DataLabs H1 2018 report, online travel in India observed five deals in the said quarter, while in FY17, online travel reported a total funding of $796 Mn. Also, the deals in this sector grew by 83% in the growth stage.
At the same time, in Southeast Asia, the governments are reportedly spending $323 Bn on the region’s infrastructure projects, funding everything from airport expansion and improvement to high-speed rail and expressway creation. The major destinations attracting the travellers are Laos, Thailand, Myanmar, Kuala Lumpur, Vietnam, and Cambodia among others.
Google-Temasek e-Conomy SEA Spotlight May 2016 report predicted that Southeast Asia’s internet economy will grow to $200B by 2025 driven mostly by the growth of online travel, e-commerce, and online media. Also, the latest Spotlight 2017 report suggests that Southeast Asia will cross these numbers in 2025, due to the rapid growth in its internet economy.
Going forward, Togedr will not only have to keep a keen eye on its revenue stream but will have to simultaneously focus on its expansion strategies. Also, with an existing fleet of online travel startups in Southeast Asia such as Easia Travel, Viator, Paddle Asia, Ulitimate Borneo among others, the road to international markets will not be that relaxed for Togedr.
Like many other global leaders, Prime Minister (PM) Narendra Modi realises the potential of new and upcoming technology in reforming sectors and the lives of people in India. With a view to ensure that India doesn’t miss the blockchain boat, PM recently said: “India’s youth can lead a revolutionary movement using AI (artificial intelligence) and blockchain technologies with a value addition.”
However, words need to be translated into action. As Inc42 earlier reported, more than 80% of the blockchain developers in India may move abroad in search of better opportunities and owing to the lack of “robust regulatory framework.”
But, what, really, is the big deal about blockchain? How is it different from cryptocurrencies like Bitcoin and Ethereum? Why is every government, consulting firm, technology giant, and startup alike — and across sectors such as e-governance, fintech, healthcare, education — rushing in to explore blockchain applications?
What is its real potential — especially blockchain as a technology/framework and blockchain-as-a-service (BaaS) — in the context of India? How are other countries exploiting blockchain to their advantage? What is the existing scenario, and the future, of blockchain in India?
This, and a lot of more questions on blockchain have remained unanswered at large, primarily due to two reasons — lack of real understanding and knowledge of the technology, and the absence of comprehensive analytical data relating to its usage/potential usage in India.
To answer these unanswered questions, cut out the hype from the reality, and clear the air of confusion pervading the technology, Inc42 is launching the Blockchain Technology Report 2018: An In-depth Study Of The Current State and Future Of Blockchain In India.
The report delves into the hype around the technology, decoding blockchain and its frameworks, and discussing its features — primarily information consensus across multiple parties, its transparency, and security. Providing a rundown on the leading frameworks — Ethereum, Hyperledger, Multichain, Corda, Quorum, Lisk, and more — the report also places the technology in context, bringing in the classic case study of Telegram. It aims to clarify the difference between blockchain and cryptocurrencies for readers with limited or no knowledge about the technology.
It also elucidates the current ongoing applications and the landscape of blockchain adaptation across the world and in India, exploring the various initiatives taken by governments the world over to incorporate the technology to bring more visibility into governance.
The report talks about the various projects being implemented by Indian government think tank Niti Aayog and state governments to digitise land records and exam certification using a blockchain called IndiaChain.
Most importantly, it discusses the vast scope of application of blockchain across industries, specifically exploring opportunities in India.
Here’s A Look At Some Global Blockchain Facts:
Only 0.5% of the world’s population is using blockchain today, but 50% or 3.77 Bn people use the Internet
Over the last five years, venture capitalists (VCs) have invested more than $1 Bn in blockchain companies
About 90% of the major North American and European banks are exploring blockchain solutions
The global blockchain market is expected to be worth $20 Bn by 2024
It is estimated that banks could save $8-12 Bn annually if they use blockchain technology
In April 2018, a group of 22 European nations formed a new blockchain partnership aimed at exchanging information on the technology. The countries, including the UK, France, Germany, Norway, Spain, and the Netherlands, signed a declaration on April 10, 2018, establishing the new group, dubbed the European Blockchain Partnership, according to a release from the European Commission, which led the effort
The increasing importance of blockchain can be understood by the fact that leading IT company Tata Consultancy Services (TCS) believes 2018-19 will be the year of blockchain adoption by the largest banks and stock exchanges in India and expects to generate at least $200 Mn in annual revenues from its blockchain practice. ICICI Bank announced that it has on-boarded more than 250 corporates on its blockchain platform for domestic and international trade finance.
Now, more than ever, Indian businesses need to be made aware of the importance of implementing blockchain in the banking system, especially to control frauds. According to a Reserve Bank of India (RBI) report, sourced by Reuters through a Right To Information (RTI) appeal, state-run banks have reported as many as 8,670 “loan fraud” cases, totalling INR 61,260 crore, over the last five financial years up to March 31, 2017.
Closely tracking the trends among the early adopters of blockchain in India, Inc42 Datalabs has also addressed the challenges blockchain startups have faced while designing PoCs (Proof of Concept).
While the Inc42 Blockchain Technology Report 2018 offers indepth insights for professionals seeking to gain an understanding grip of the subject, it could be a fun read for n00bs looking to decode the technology — especially for those who have been bingeing on Mr Robot, a popular TV series based on cryptocurrency, primarily the Bitcoin.
In the blockchain world, find out which block does India stand in.
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Gurugram-based online restaurant discovery and food delivery platform Zomato has acquired Bengaluru-based startup TongueStun Food for about $18 Mn in a cash and stock deal.
TongueStun was founded by Manjunath Ramakrishnan in 2012. The startup works as an e-marketplace and has so far raised around $5 Mn funding from Unicorn Ventures, the early stage investing arm of investment bank o3 Capital and Haresh Chawlawho is a partner at private equity fund, True North.
In an email interaction with the Inc42 team, an official spokesperson of the Zomato team confirmed the deal.
Zomato plans to incorporate the capabilities of TongueStun app within Zomato app which will provide a high-frequency use case for the users. This will allow them to order food for pickup from their cafeterias using the Zomato app.
The company has also confirmed that post-acquisition, the TongueStun team would not change and the services will continue as is, in the same shape and form for all business partners.
“We see immense growth opportunity in the food@work (food at work) space, and with the help of TongueStun, we hope we’re able to delight our users at their workplaces as well. This market is very high frequency, and customers are very sticky as they end up placing more than 20 orders a month on the TongueStun platform,” the Zomato spokesperson said.
The acquisition of Tonguestun is the 12th acquisition deal for Zomato globally. Including the acquisition of TongueStun, so far Zomato has acquired four Indian startups which include Bengaluru-based Runnr, a B2B online service provider platform for hyperlocal logistics service, Delhi-based MapleGraph, and a tech-based logistics company Sparse Labs. Other global startup acquisitions by Zomato include NexTable, Mekanist, Urbanspoon, Cibando, LunchTime, Obedovat, Menu Mania and gastronauci.pl.
According to April 2017 report by Netscribes, the online food delivery market in India can be expected to grow by 34-36% over 2015 to 2020.
However the report also state that despite the popularity of online food ordering, market penetration at the time of publishing of the report was only around 0.7%.
In June 2018, online food delivery giants such as Swiggy, Zomato, UberEats, and FoodPanda, among other local players were in talks with government as they were facing challenges when the GST on restaurants was cut to 5% from 18% in November 2017 and the input tax credit (ITC) provision was withdrawn.
Post after November 2016 demonetisation, there has been an open battle between fintech players on who diversifies the maximum and how fast. While Paytm and PhonePe’s growth trajectories have taken a drastic shift in past one year, MobiKwik, however, has been still looking to claim its top spot in the digital payments segment. On the positive note, however, the company has continued to introduce new features in line with the consumer demands and has now entered into yet another sector – the wealth management.
MobiKwik today announced its foray into the wealth management space with a 100% acquisition of Clearfunds, an online wealth management platform based out of Mumbai. This is the first acquisition ever by MobiKwik and will help the brand to further strengthen its foothold in the digital financial services industry.
This comes on heels of the launch of Paytm’s wealth management division–Paytm Money, early this year in January 2018. Paytm Money has started with its public operations in September this year and claims to have a registered user base of 850 Mn.
Also, as Inc42 reported earlier, with a more than 100-member team led by Whole-time Director Pravin Jadhav, Paytm Money has received an investment commitment of $10 Mn from its parent One97 Communications for setting up of its operations.
To pace up, MobiKwik will be investing $15 Mn over the next year to scale up its wealth management business. The company currently has a user base of more than 107 Mn. Post the acquisition, the founder and CEO of Clearfunds, Kunal Bajaj will lead MobiKwik’s wealth management business.
How Clearfunds Will Add An Edge To MobiKwik
Founded in 2016, Clearfunds is a direct mutual fund investment platform that uses powerful data analytics and automated processes to deliver the best possible investment experience at the lowest possible cost.
It offers ‘Smart Portfolios’ feature which is a fully automated investment advisory service designed to make investing easy for everyone.
Clearfunds uses sophisticated computer algorithms to build, monitor and rebalance diversified mutual fund investment portfolios suited to an investor’s stated goals, time horizon and risk tolerance.
Further, the company already has $45 Mn worth of assets under advisory and its platform allows clients to access over 3,000 direct mutual fund schemes across all 36 Mutual Fund Companies (AMCs) and four Registrar and Transfer Agents (RTAs). To be noted, as of now, Paytm Money has partnered with 25 asset management companies (AMCs).
Upasana Taku, Co-Founder and Director, MobiKwik, is certain that this acquisition will help them get a head start in the wealth management domain.
“Clearfunds has done exceptionally well in a short span of time and has an edge over its competitors, owing to its superior technology know-how and advanced data analytics. MobiKwik users will now be able to start their investing journey with as little as INR 100. We will continue to look at strategic investments or acquisitions that can add value to our business,” she added.
According to the IBEF, the mutual funds (MF) industry in India has seen rapid growth in its total AUM. he AUM of the industry increased 25.79% year-on-year to hit a record high of $ 342.91 Bn (INR 22 Lakh Cr) at the end of February 2018. At the same time, the number of MF equity portfolios reached a record high of 2.27 Bn in the same month.
But again, the competition in this space is as much big as the opportunity itself. In the mutual funds’ industry, startups such as Fisdom, a personal wealth management startup; WealthTrust, a wealth management application; Tauro Wealth, a stock market investments platform; Tipbazaar; and Scripbox have been working to tap into the growing market. Most recently, ETMoney, after operating for three years as a regular mutual funds platform, has now shifted to offering only direct mutual fund plans on its platform.
How well MobiKwik will be able to capitalise on this new investment, will be interesting to watch.
“Blockchain isn’t a disruptive technology; it’s a foundational technology.” — Harvard Business Review
Prime Minister Modi’s flagship project — the Smart Cities Mission — has unleashed a huge potential market for the cutting-edge technology market in India. Blockchain is one of them. This despite the fact that the mega-project, which was launched on June 25, 2015, reportedly failed to meet the deadline with only 1.8% of the sanctioned funds having been utilised so far.
With a view create livable cities for its citizens, 100 cities have been selected under the Smart Cities Mission. The goal of the Mission is to implement innovative digital technologies in these smart cities and dovetail them with the Digital India vision to enable the digital empowerment of citizens. The project envisions the integration of ‘digital’ into every aspect of city life — from infrastructure, healthcare, education, cleaning, hygiene, waste management to services.
On May 17, the Indian Ministry of Housing and Urban Poverty Alleviation issued a clarification and an update on the Smart Cities Mission, saying that so far 1,333 projects worth INR 50,626 Cr have been completed or are under implementation/tendering.
If the Mission is to make lives in smart cities as digital as possible, the technology behind it has to be blockchain. The technology, which is transforming the foundations of entire industries, can act as both the brain and soul of smart cities integrating key factors such as adaptability, accountability, transparency, accuracy and efficiency into the machinery that runs these cities.
For readers who are still new to the blockchain bandwagon, a blockchain is a distributed ledger technology that stores information across a number of systems enabling peer-to-peer (P2P) transactions and creating a trust-free, secured distributed storage using a validation process which is fully democratic in nature and is based on consensus. Here, “trust-free” means a blockchain network does not need any intermediary entity for any sort of validation.
Most importantly, blockchain (Public) uses either a proof of work (PoW) or a proof of stack (PoS) to arrive at the consensus, after which data once recorded in a block and added to the block-tree (blockchain) can’t be deleted and manipulated. This brings transparency and removes any scope of data manipulation.
Right from voting, security, land registration, logistics, healthcare, power distribution, banking, certificates — birth, death, education, residential and so on — to other governance-related areas, blockchain removes the “trust factor” completely.
While the Indian government is yet to explore the entire gamut of potential applications and implementation of blockchain in smart cities, a series of blockchain-based PoCs (proof-of-concept) have already been built into the areas mentioned above. The NITI Aayog should take a serious look at these PoCs while working on IndiaChain, a mega blockchain project that’s crucial for the implementation of the Smart Cities Mission.
One of the biggest issues with blockchain implementation has been the lack of a comprehensive report relating to Indian scenario.
Taking the initiative of filling the gap in this regard, Inc42 has just launched the Blockchain Technology Report 2018: An In-depth Study Of The Current State and Future Of Blockchain In India.
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Considering we’re fast heading towards a future where data is the new oil and where life could be encrypted in data packs, it has become extremely important to secure data first. With an optical fibre network already been laid across, expanding at a CAGR of 17%, and 4G communication being widely available, securing cities’ data via blockchain won’t be a tough task.
Kamanashis Biswas and Vallipuram Muthukkumarasamy of Griffith University, Australia, in their research paper Securing Smart Cities Using Blockchain Technologyshow how a security framework can integrate blockchain with smart devices to provide a secure communication platform in a smart city.
As highlighted by Biswas, “The main advantage of using blockchain security framework is that it is resilient against many threats. Further, it provides a number of unique features such as improved reliability, better fault tolerance capability, faster and efficient operation, and scalability.”
“Thus, integration of blockchain technology with devices in a smart city will create a common platform where all devices would be able to communicate securely in a distributed environment. The future works will aim to design a system-level model to investigate the interoperability and scalability of different platforms used in a smart city,” the paper added.
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Blockchain Can Help Secure Aadhaar And The Electoral System
In the existing scenario in India, where half of the data is in hard copies and half is integrated with digital systems across sectors and organisations, data can be easily manipulated, controlled, or erased by any intermediary entity, and users have to rely on the “trust” of data operators, controllers, and processors.
For instance, a number of complaints have been made on the massive Aadhaar data leaks. However, not once has the Unique Identification Authority of India(UIDAI) acknowledged the problem. The issue now is no more about just data security now, but about the “trust” of people in the organisation.
To tackle this problem, India can take a leaf out of Estonia’s book. Similar to what Estonia has done with its e-residential data, the entire Aadhaar data of a smart city citizen could be replicated on a public blockchain model, which will once and for all erase the “trust” issue the organisations like the UIDAI.
In Estonia, even after giving his/her nod, a citizen can at any point in time fetch his/her personal information and see the list of organisations that have accessed the data, when they’ve accessed it, and for what purpose the data was fetched.
A similar system could be implemented to ensure transparency and security of India’s voting system as well. At a time when with every passing election, complaints of manipulation of electronic voting machines (EVMs), records, and data are rising, blockchain could be a sure shot way to erase the “trust” over the machine, which can reportedly be easily rigged.
The smart cities project could pave the way to adopt blockchain in the world’s largest voting system, which will not only bring down the cost of conducting elections, but will also majorly improve the transparency and efficiency of the system.
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Adopting Blockchain In Health, Land, Education, And More
Besides banking, given the push for maintenance of electronic health records (EHR) across government and private healthcare institutions, blockchain can change the way healthcare data relating to critical drugs, blood, organs, medical licenses, and doctors’ records are handled at present.
Inc42’s Blockchain Report 2018has also elaborated how the Rajasthan government is implementing blockchain in maintaining EHR.
According to a Deloitte-WSJ report, about 70% of health plan and health system IT executives believe that blockchain holds significant promise for healthcare interoperability.
Similar is the case with other records — educational certificates or records, birth/death certificates, land records, energy distribution, and all other data that comes under the RTI can be brought on the blockchain.
Blockchain can also be used in warehousing, cold storage, and to store other agro-data to increase transparency, reduce complexity, and the cost in the existing scenario.
Once data related to any topic/issue is added on a public blockchain, it can do away with the entire RTI system, as the data can be fetched by anyone, anytime, depending on the permissions granted.
NITI Aayog, which has been working on a concept paper for IndiaChain, which it describes as a “shared, India-specific blockchain infrastructure”, hasn’t provided any further update since last year. Similarly, the Smart Cities Mission is also not being implemented the way it was planned.
However, regardless of how slow or fast the development is, there is immense potential for blockchain implementation in making smart cities really, truly smart. The sooner the authorities realise, the better will the project optimisation be.
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Gurugram-based adventure and activities based experiences platform and community Togedr has raised an undisclosed amount of funding from a group of US & UK-based startups. The investment was led by UK-based investor Anil Patel whose expertise lies in cloud architecture and scale, said Togedr CEO and founder Ashish Yadav, in a recent interaction with Inc42.
The US-based digital and travel domain MAW Media and Nalini Singh who has expertise in APAC market expansion and digital marketing & partnerships from platforms like Facebook, Google and Microsoft also participated in this round of funding.
Founded in December 2016, Togedr curates adventure activities like trekking, camping, scuba diving, safari, and bungee jumping among others. It was also selected to be part of FBStart in January 2017, where the startup received $40K worth of credits and services from Facebook and its partners including UserTesting, Dropbox, and MailChimp.
The startup plans to use the latest round of funding for building better tech and APIs which can be shared with their partners, expand digital marketing, and have more people in operation site where they can bring more activities in the platform.
At the same time, the Togedr team is also aiming to launch international hikes and corporate activities in South East Asia market, as well asexpand its presence in Bengaluru and Goa.
“We got the core tech, digital marketing fundamentals and community principles right, solidified our B2B offerings to sustain our revenue stream and built the platform that can scale-up. Now we are looking to grow rapidly using the investment in product development,” said Ashish.
From A Community App To An Adventure Travel Platform
Ashish who comes from an army background conceptualised the idea of Togedr with a vision to build one single platform wherein one could connect with like-minded people based on the activities they are interested in.
The Togedr service was initially launched as an ‘app-first’ community to find an activity buddy in Delhi/NCR and book an activity through its app. The service lacks a monetisation model, however, the Fbstart programme proved to be a turning point for Ashish.
“We learnt the rules of community building, trust and organic growth from the masters of the art at Facebook.”
The result? Togedr have now taken down the app from both the stores (Android and iOS) to reintroduce it by this year end with better design elements and launched a mobile-friendly website and live chat using Facebook messenger API both of which unlocked user growth by 200% month-on-month.
As of today, 20% of their bookings come through Facebook direct messaging and Whatsapp for Business app. Also, the team personally ensure the quality of services listed on the platform. For instance, safety tests for trekking guides in Roopkund – which is a popular but difficult Indian trek, doing the test run of paramotoring partners in Gurugram.
The team of six is now looking to leverage the new tech stack (MERN Stack) for building open APIs to share with Togedr’s partners’ Hotel chains, Banks among others. It is also looking to grow out Affiliate network with bloggers and Instagram influencers, hiring the right team and finally- investing more in digital marketing on Google and Facebook to solidify its revenue stream further.
Togedr: Creating A Niche For Itself
Adventure tourism is one of the most popular segments of the tourism industry. Owing to India’s enormous geophysical diversity, it has progressed well over the years. As stated by IBEF in its annual tourism and hospitality report April 2018, the adventure has been considered as a part of India’s tourism policy, and almost every state has a definite programme to identify & promote adventure tourism.
According to a recent study by Jaipur-based adventure tourism platform (and one of the arch rivals of Togedr) Thrillophilia, the adventure tourism and activity travel market is estimated to grow at a CAGR of 17.4% from 2017 to 2023 in India. Further, in India, demand for activities and local experiences has grown by 178% over the past three years.
However, with the burgeoning opportunity comes the cut-throat competition, that too with biggies such as ClearTrip Local Experiences, Yatra Journeys, AirBnB Trips as well as the existing brigade of startups including some notable names such as Trippongo, TripSavvy, TravelTriangle, Expedia, Ebix-acquired Via.com, among others.
Ashish, however, believes that adventure as a business model and an industry is still emerging in India. People want to experience a new destination every weekend. However, even in urban India, the majority population is hustling in their day to day life and spending INR 4K to 13K on a weekend trip is still a challenge for many.
“We are aiming to make a dent in this niche by forming strategic partnerships with the service providers to ensure good customer experience at affordable costs,” he added.
Tourism: India Vs Southeast Asia
Overall, as per IBEF, the direct contribution of travel & tourism to India’s GDP is expected to reach $148.2 Bn by 2027, which is further attracting the investors globally to this segment, and enhancing partnerships and consolidations.
According to Inc42 DataLabs H1 2018 report, online travel in India observed five deals in the said quarter, while in FY17, online travel reported a total funding of $796 Mn. Also, the deals in this sector grew by 83% in the growth stage.
At the same time, in Southeast Asia, the governments are reportedly spending $323 Bn on the region’s infrastructure projects, funding everything from airport expansion and improvement to high-speed rail and expressway creation. The major destinations attracting the travellers are Laos, Thailand, Myanmar, Kuala Lumpur, Vietnam, and Cambodia among others.
Google-Temasek e-Conomy SEA Spotlight May 2016 report predicted that Southeast Asia’s internet economy will grow to $200B by 2025 driven mostly by the growth of online travel, e-commerce, and online media. Also, the latest Spotlight 2017 report suggests that Southeast Asia will cross these numbers in 2025, due to the rapid growth in its internet economy.
Going forward, Togedr will not only have to keep a keen eye on its revenue stream but will have to simultaneously focus on its expansion strategies. Also, with an existing fleet of online travel startups in Southeast Asia such as Easia Travel, Viator, Paddle Asia, Ulitimate Borneo among others, the road to international markets will not be that relaxed for Togedr.
Three people, including two employees, of Noida headquartered Paytm were arrested on Monday on accusations of planning to extort INR 20 Crores ($2.71 Mn) from Paytm’s founder, Vijay Shekhar Sharma.
Sharma’s Secretary, Vice President Corporate Communications and Public Relations — Sonia Dhawan has been arrested on accusation of being the mastermind behind the same.
Her husband Rupak Jain and another Paytm employee Devendra Kumar have also been arrested in the matter.
The investigation is being led by Senior Superintendent of Police (SSP), Gautam Buddh Nagar, Ajay Pal Sharma.
A complaint was filed by Paytm founder stating that the company’s employees, a woman and her aides, had stolen some data from the company and were threatening to leak it. They were demanding INR 20 Crore in ransom. The FIR was filed and three people were arrested.
“They are being probed about the data and their modus operandi. Police will share the facts as they are unearthed,” Sharma added.
He further added that Kolkata resident Rohit Chomal, who is the fourth accused, had made the extortion call to Vijay Shekhar Sharma’s brother Ajay Shekhar Sharma. The police is currently trying to track Chomal down.
Paytm confirmed the development and, in a statement to Inc42, said, “Noida Police has arrested three people including one female employee of Paytm in case of extortion. The employee along with two other accomplices attempted to extort money from Vijay Shekhar Sharma on the pretext of leaking his personal data. We are standing by our colleagues till the police enquiry reaches its meaningful conclusion.”
The FIR has been filed at Noida sector 20 police station and the accused have been booked under Indian Penal Code sections 381, 384, 386, 420, 408, 120 B and 66A of IT Act.
Section 381: Theft by clerk or servant of property in possession of master,
Section 384: Punishment for extortion
Section 386: Extortion by putting a person in fear of death or grievous hurt,
Section 420: Cheating and dishonestly inducing delivery of property
Section 120 B: Punishment of criminal conspiracy
Section 66A of IT Act: Punishment for sending offensive messages through communication service
The police, who are currently unclear about the nature of the data that has been stolen, will seek their custody to interrogate them further.
This is not the first time that a matter related to Paytm’s employees being accused of data theft from the company has come to light. Earlier this year, a former Paytm employee and five others were arrested on the charges under Indian Penal Code sections related to criminal conspiracy, cheating and IT Act violation. According to the filed charge sheet, they were accused of cheating the company by using Paytm’s employee id and default password generation system.
Post after November 2016 demonetisation, there has been an open battle between fintech players on who diversifies the maximum and how fast. While Paytm and PhonePe’s growth trajectories have taken a drastic shift in past one year, MobiKwik, however, has been still looking to claim its top spot in the digital payments segment. On the positive note, however, the company has continued to introduce new features in line with the consumer demands and has now entered into yet another sector – the wealth management.
MobiKwik today announced its foray into the wealth management space with a 100% acquisition of Clearfunds, an online wealth management platform based out of Mumbai. This is the first acquisition ever by MobiKwik and will help the brand to further strengthen its foothold in the digital financial services industry.
This comes on heels of the launch of Paytm’s wealth management division–Paytm Money, early this year in January 2018. Paytm Money has started with its public operations in September this year and claims to have a registered user base of 850K.
Also, as Inc42 reported earlier, with a more than 100-member team led by Whole-time Director Pravin Jadhav, Paytm Money has received an investment commitment of $10 Mn from its parent One97 Communications for setting up of its operations.
To pace up, MobiKwik will be investing $15 Mn over the next year to scale up its wealth management business. The company currently has a user base of more than 107 Mn. Post the acquisition, the founder and CEO of Clearfunds, Kunal Bajaj will lead MobiKwik’s wealth management business.
How Clearfunds Will Add An Edge To MobiKwik
Founded in 2016, Clearfunds is a direct mutual fund investment platform that uses powerful data analytics and automated processes to deliver the best possible investment experience at the lowest possible cost.
It offers ‘Smart Portfolios’ feature which is a fully automated investment advisory service designed to make investing easy for everyone.
Clearfunds uses sophisticated computer algorithms to build, monitor and rebalance diversified mutual fund investment portfolios suited to an investor’s stated goals, time horizon and risk tolerance.
Further, the company already has $45 Mn worth of assets under advisory and its platform allows clients to access over 3,000 direct mutual fund schemes across all 36 Mutual Fund Companies (AMCs) and four Registrar and Transfer Agents (RTAs). To be noted, as of now, Paytm Money has partnered with 25 asset management companies (AMCs).
Upasana Taku, Co-Founder and Director, MobiKwik, is certain that this acquisition will help them get a head start in the wealth management domain.
“Clearfunds has done exceptionally well in a short span of time and has an edge over its competitors, owing to its superior technology know-how and advanced data analytics. MobiKwik users will now be able to start their investing journey with as little as INR 100. We will continue to look at strategic investments or acquisitions that can add value to our business,” she added.
According to the IBEF, the mutual funds (MF) industry in India has seen rapid growth in its total AUM. he AUM of the industry increased 25.79% year-on-year to hit a record high of $ 342.91 Bn (INR 22 Lakh Cr) at the end of February 2018. At the same time, the number of MF equity portfolios reached a record high of 2.27 Bn in the same month.
But again, the competition in this space is as much big as the opportunity itself. In the mutual funds’ industry, startups such as Fisdom, a personal wealth management startup; WealthTrust, a wealth management application; Tauro Wealth, a stock market investments platform; Tipbazaar; and Scripbox have been working to tap into the growing market. Most recently, ETMoney, after operating for three years as a regular mutual funds platform, has now shifted to offering only direct mutual fund plans on its platform.
How well MobiKwik will be able to capitalise on this new investment, will be interesting to watch.
Update 1: October 16, 2018 at 17:56
The story incorrectly mentioned Paytm Money user base as 850 Mn. It has now been updated to 850K
Update, October 26, 8.25am: Contradictory to what one of the members of the police investigation team from the Sector 20 police station, Noida, earlier told Inc42, it is only Devendra Kumar — one of the three accused arrested — who has confessed to stealing personal data from Paytm founder Vijay Shekhar Sharma’s mobile and computer and has admitted to Sonia Dhawan’s involvement in the extortion plan. The other two accused, Sonia Dhawan and her husband Roopak Jain, have so far claimed innocence. Details here. Following is the earlier story published by Inc42.
Almost 24 hours after their arrest, the blackmailers of Paytm founder Vijay Shekhar Sharma — Sonia Dhawan, her husband Roopak Jain, and another Paytm employee Devendra Kumar — have confessed to their crime.
One of the members of the police investigation team from the Sector 20 police station, Noida, told Inc42 that Sonia, Roopak and Devendra have accepted the extortion crime charges imposed upon them. Kolkata resident Rohit Chomal, who is the fourth accused, is absconding.
It must be noted that Sonia was vice-president, corporate communications and public relations, of Paytm as well as the secretary of Vijay. She has been working with the Paytm chief for 10 years.
Paytm Extortion Case: For The Uninitiated
As Inc42 reported earlier, on the morning of October 22, police arrested Sonia, alleged to be the mastermind behind the extortion plan, and two of the other three accused in the crime. They had allegedly planned to extort INR 20 Cr ($2.71 Mn) from Sharma in lieu of stolen personal data from Vijay’s computer and mobile phone and were threatening to leak it.
An FIR was then filed by Paytm founder’s brother Ajay Shekhar Sharma, who reportedly received an extortion call from Chomal. Inc42 has the copy of the FIR filed.
According to the FIR, Sonia, Roopak, Devendra, and Rohit have been accused of extortion, fraud, humbuggery, getting illegal access of one’s personal mobile and computer data, threatening, among others against Sharma. The aim and intent was stated to be maligning Vijay and Paytm commercially and personally.
The accused have been booked under Indian Penal Code (IPC) sections 381, 384, 386, 420, 408, 120B, and 66A of the Information Technology (IT) Act.
Section 381: Theft by clerk or servant of property in possession of master
Section 384: Punishment for extortion
Section 386: Extortion by putting a person in fear of death or grievous hurt
Section 420: Cheating and dishonestly inducing delivery of property
Section 120B: Punishment of criminal conspiracy
Section 66A of IT Act: Punishment for sending offensive messages through communication service
How This Master Plan Was Executed?
As claimed in the FIR, Ajay and his brother Vijay received WhatsApp calls from Rohit on September 20 at 11 am and 4 pm, respectively. Rohit claimed to be in possession of some confidential personal data belonging to Vijay and demanded an amount of INR 20 Cr. He allegedly threatened the duo that he would make the sensitive personal data public in case of denial.
Rohit demanded that the amount be deposited in his ICICI bank account number 0006050215968, IFSC Code icic0000006. Ajay then deposited an amount of INR 0.67 Lakh and INR 2 Lakh in the said bank account on Oct 10 and Oct 15, respectively, the FIR claimed.
Later, Rohit called again, threatening Ajay and asking him to quickly arrange INR 10 Cr. At that time, Ajay was able to convince him to delve more information on the kind of data he had in his possession.
As mentioned by Ajay in the FIR, “Chomal told me that Sonia and her husband Rupak along with Devender wanted to malign the reputation of my brother and the company. Since she has the full access to Sharma’s mobile and laptop, she did the data theft unethically and pass on the data to Chomal for blackmailing us.”
The investigation is being led by investigating officer (IO) Manoj Kumar Pant.
Case Not A First In Indian Startup Ecosystem
Paytm founder Vijay and his family are not the first ones to face such alleged extortion demands from their employees in the Indian startup ecosystem.
Earlier this year, Flipkart filed a police complaint against one of its major suppliers, Macrowagon Retail (MRPL), and one of its employees for alleged criminal offences of cheating, fraud, forgery, and breach of trust. MRPL along with the Flipkart employee, designated to liaise with MRPL, were importing sub-standard products at a lower price while continuing to charge the rate agreed upon for genuine goods.
Last year, reports surfaced that two of Swiggy’s employees, in an anonymous blog post, accused Swiggy of cheating restaurants, users, and investors. Swiggy, however, hinted at foul play. Swiggy CEO Sriharsha Majety said that the company had “good reason” to disbelieve that its former employees were behind the anonymous post.
The Indian startup ecosystem, which was earlier battling various controversies, has now moved past them, but it is such criminals inside their teams that companies have to out watch for.
The Paytm case has so far revealed one side of the coin. However, it is difficult to understand what made well-earning, reputed employees of the company take a step like this, if at all. Was easy money the only reason or is there some deeper agenda hidden here?
For now, the startup ecosystem is left with another lesson of its lifetime.
This article is part of a series by Inc42 that will bring to the fore the voices of key stakeholders to help you cut through the noise and decode the Indian Startup Ecosystem. As part of this effort, Inc42 is also hosting The Ecosystem Summit — an invite-only summit curated to bring together an unparalleled group of CEOs, founders, investors, and industry experts — on November 16.
According to Ernst and Young (EY), there’s a global trend on the prowl where one is seeing the balance of power tipping away from large corporations toward agile startups.
The report states that corporates face the challenge of generating their own disruption while startups often deploy new digital technologies to challenge legacy players who are weighed down with massive investments in infrastructure, processes, and customers.
Global IT services giant Accenture seems to have found a way to overcome the challenge through its venture capital arm, Accenture Ventures. It is the magic bullet that the multinational company is using to remain agile to adapt to changes taking place in technology, especially those that involve deep tech like artificial intelligence (AI) and IoT.
Accenture is just not partnering with startups but also with other big companies. Take, for example, its agreement with Microsoft to build custom AI services tailored for customers in specific industry verticals.
Inc42 recently caught up with Avnish Sabharwal, the managing director of Accenture Ventures, who was also a speaker at the NASSCOM Product Conclave 2018 held in Bengaluru, where the topic of discussion revolved around the next frontier of disruptive technology innovations with the key focus this year being “Product Mission 2020: Are We Ready?”.
One of the questions we asked Sabharwal was why hasn’t India a significant startup in the field of deep tech till date. This was his reply: “The challenge that startups are facing in the deep tech space is that this sector requires a long gestation period…if you take a look at Israeli startups and go into the reasons as to why they are so good is because they have been incubated for a long period of time either by the military or academia before they come out with their product.” According to him, unfortunately, in India, one doesn’t have that opportunity and people generally put money in ventures where they can get a quick return on investment (ROI).
What also complicates matter is that once the product is out, larger companies are not willing to pay the kind of price such advanced tech-based products demand.
“Both startups and corporates are not able to ascertain the value of deep tech products, especially because it’s a technology that is still evolving,” says Sabharwal.
A 2017 NASSCOM-Zinnov report indicated that India is the third-largest AI startup ecosystem with Bengaluru being a leading hub for deep tech startups, followed by Hyderabad and the National Capital Region (NCR).
Next Evolution of Deep Tech Startups In India
According to Sabharwal, when the product-market fit is done, one of the next steps is to start thinking global, and that is something that startups in India are getting used to. “Most of the corporates prefer to work with startups outside India because most their business is outside India online and so, for them, it is easier to work with startups in their geography,” he says.
“Indian companies should be doing much more when it comes to working with startups,” adds Sabharwal.
So, what role can corporates play in working with startups in India?
Sabharwal explains the various stages where the opportunity to collaborate exists. According to him, during the early stage, startups can work with corporates in the discovery/ideation are where the former can help the latter discover the next disruption platforms.
The second stage for a startup is translating the use case into a minimum viable product (MVP) and this is something corporates can help startups do very quickly. The agility to do these things gives a corporate parallel capability to juggle multiple products at the same time.
Sabharwal feels that the one drawback while working with startups is that they are great innovators but are not the best when it comes to delivery. “The biggest evolution for us has been to go beyond the proof-of-concept stage (PoCs). Our support system eases processes like legal hygiene and drafting of contracts. One of the reasons why we have been successful is that we have put the needs of the startups as paramount,” he explains.
He adds that most of the collaborations seen between startups and corporates end at the PoC level, which is not the case with Accenture. His company focuses on taking the solution from PoC to scale and production.
Way Ahead For Deep Tech In India
As technologies evolve, so do regulations, with the government and regulators trying to keep checks and balances in these advancing technologies.
Regulations like the GDPR in Europe and the draft Data Protection Bill in India are giving companies and startups much to worry about when it comes to how they access and use user data.
“Policy and regulation always lag behind innovation. With all this noise, the startups are also getting aligned. For deep tech startups, the biggest problem with data is getting access to data because if you are looking at an AI startup a lot depends on the quality and quantity of data which is why the Chinese are doing so well,” says Sabharwal.
“If the consumer is given the right incentives, they will share the data,” Sabharwal adds.
According to Sabharwal, the need of the hour is for deep tech Indian startups to access data, but in a secure environment.
Talking about trends, he mentions that one of the hottest in-demand technologies this year is going to be robotic process automation (RPA) and most organisations are realising that the journey to streamline AI starts with RPA. Some of the sectors that will drive RPA include banking, insurance, and finance. From an AI perspective, AI bots will gain further prominence with most organisations employing them.
“You can already see this happening if you look at the kind of funding and valuations that RPA startups are getting like UI Path, a billion dollar-plus valuation,” he says.
Sabharwal believes that technologies such as blockchain and cybersecurity are trends to watch out for, but that “is not happening right now” and it may be up to two years before we start seeing real traction with real ROI from blockchain startups.
Ecommerce companies are in a fix as they reportedly struggle to comply with a November 10 deadline to deposit tax collected at source on all payments made to their sellers in the last month.
The Tax Collected at Source (TCS) provisions, introduced as a part of Section 52 of the Central GST Act, states that tax has to be collected by the ecommerce operator when a supplier supplies some goods or services through its portal and the payment for that supply is collected by the ecommerce operator. The deadline which has less than two days to go, has been deferred repeatedly following requests by ecommerce players.
When TCS was first introduced in July 2017, the measure was not well received by ecommerce platforms, who argued that the rule placed extra compliance burden on them.
Following protests by the industry, the GST Council had deferred implementation of TCS for a year from July 1, 2017 till June 30, 2018. It was again put off till September 30 and then finally implemented from October 1.
Some ecommerce companies have also said that they are unable to comply with the directive because a number of them have not been able to register for collections of TCS as some states are insisting that ecommerce companies have a brick and mortar office within their jurisdiction.
However the centre has clarified that registration for paying state taxes can be done with a head office address and ecommerce players do not require a brick and mortar space in every state.
Government’s Push To Regulate Ecommerce Taxes
According to the anti-tax avoidance measure, ecommerce companies will have to deduct tax at the rate of 1% (CGST)+1% (SGST) before making the payment to the supplier for proceeds of a sale, as per the provisions of the act.
The directive is aimed at keeping a check on tax evasion as tax deducted at source (TDS) and TCS as these will leave a trail of transactions that can be tracked.
However ecommerce players have pitched for a deadline as they have reportedly faced issues in registering on the tax portal which does not accept any district except those in that state although it should be enabled for all districts in India.
Ecommerce players have also requested the government to provide a single-registration system instead of multiple state registrations as the latter would increase their compliance costs.
If unable to deposit the tax collected last month by November 10, companies will reportedly be liable to penal provisions.
Thirty speakers, 250 delegates, an incisive agenda that aims to draw valuable insights into the state of the Indian startup ecosystem — all in one action-packed day.
Inc42 is proud to bring to you our flagship event — The Ecosystem Summit (TES). The first such summit of its scale in the Indian startup ecosystem, TES brings together some of the most influential CEOs, founders, investors, government representatives, and visionaries who will engage in daylong, curated panel discussions, deep-dive talks, and fireside chats to help decode India’s complex and rapidly growing startup landscape.
TES is Inc42‘s effort to spark off conversations on the ins and outs of funding, the rise of unicorns in India, policy framework for innovation, the corporate-startup connect, and more, with a view to examine the current state of the ecosystem and read the signals of the future. And this is just the beginning of an engagement among ecosystem stakeholders that we intend to facilitate further in days to come.
Minister of Commerce and Industry Suresh Prabhu will grace the event, along with Minister of State for Civil Aviation Jayant Sinha, Niti Aayog CEO Amitabh Kant, and Secretary of Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek. Prabhu will launch Inc42‘s flagship report — The State Of The Indian Startup Ecosystem 2018. Inc42 will also unveil the 42Next – a list of 42 the most promising startups in India.
The Ecosystem Summit will provide an environment of inspiration and insights like no other. So, watch this space for live updates from the event, being hosted at Hyatt, Delhi.
7:40 PM
Some startups are path-breaking not for the amount of funding they have raised or their market share. Inc42 has made a list of five startups which have made an impression on us for the creativity they have showed and the impact they can have on the society.
Tesseract
In July, Tesseract introduced what is being touted as the first made-in-India Artificial Reality (AR) headset — Holoboard, and works with smartphones. Users of AR headsets can see digital and virtual images in the real world around them.
Since its inception in 2015, Tesseract has launched three hardware and two software products in the MR, AR, and VR sectors — Methane, Holoboard, and Quark. The founder claims to have seven patents: one US, three international (130 countries), and three India patents.
Nirmai Solutions
facts, 95% of breast cancers are curable if detected early. Yet 76,000 women die in India alone and more than 700,000 globally, every year. This did not sit right with Dr. Geetha Manjunath and Nidhi Mathur, who setup Niramai in 2016. NIRAMAI stands for Non Invasive Risk Assessment with Machine Learning. It is working on a non-invasive, radiation-free, painless and low-cost, breast cancer-screening solution.
Yulu
Shared bicycles appear to be just the thing required to ease the congestion of polluting vehicles, especially in metropolitan cities. To solve this problem, InMobi’s co-founder Amit Gupta has launched Yulu – an IoT-enabled bike rental platform.
ION Energy
Based in Mumbai, ION Energy is an energy storage startup that is working to build a layer of infrastructure to enable faster adoption of high power electric vehicles in India. The company is in the business of high-performing batteries and electric vehicles.
ION Energy currently leverages deep proprietary technology that combines it strengthens in design, electromechanics and battery management systems and software.
Drivezy
Mumbai-headquartered P2P bike and car rental startup Drivezy was founded in April 2015 by Ashwarya Pratap Singh, Hemant Kumar Sah,Vasant Verma, Abhishek Mahajan, and Amit Sahu. Drivezy was selected for Google’sLaunchpad Accelerator program in November 2015 as well as for Y combinator’s summer batch of 2016.
7:30 PM
While we at Inc42 work to build a more connected ecosystem at the community level, there are some startups which have shown extraordinary resourcefulness and overcome challenges on their way to success. As part of the event we are releasing a list called of these pioneers called The 42Next, to not only honour these pioneers but also learn from their example.
7:20 PM
Inc42 presents a one-on-one chat between Vaibhav Vardhan and Divyank Turakhia, Founder, Media.net and Directi Group.
6:51 PM
Amit Sharma announced that RDGlocal is all set to heat up the Indian social media and content landscape, committing $100 Mn to the content business.
With a strategy to build a content eco-system with different assets which can cross-leverage each other. The fund aims to make these content-specific investments over the next two years.
RDGlocal has already invested in ‘WeLike’ — a social media platform in India, which has content available in seven languages already.
6:10 PM
India’s growth story is not just a country’s growth story but a global one. India’s startup ecosystem has been interacting and collaborating actively with the ecosystems of these countries and these synergies have contributed significantly to India’s economy. This discussion on the ‘India-Japan Connect’ is moderated by Rajesh Sawhney, Founder, GSF and Innerchef, will look at cross-border partnerships.
On the panel are Hiro Mashita, Director M&S Partners, Mayank Shiromani, VP, Recruit Holdings Hirokazu Nagano, President, KLab, Milojko Spajic, Founding Partner, Das Capital Takeshi Ebihara, Founding General Partner, Rebright Partners.
Milojko Spajic said that the collaborative atmosphere in India is unprecedented. This atmosphere creates a high barrier for businesses where only the best survive, he said.
Our focus in India will not be sector-wise, but in the type of stage of the startups, Spajic said.
The Ecosystem Summit Trivia: In terms of Foreign Direct Investment (FDI) Japan comes second to only the US as an investor in India.
5:50 PM
A valuable alternative to equity for startups, venture debt is increasingly gaining popularity with new companies which need to raise funds for growth.The concept of venture debt is evolving in the past three years, partly due to growing demands of startups which are looking beyond venture capital to finance their needs.
In a talk titled ‘Venture Debt For Emerging India’, Rahul Khanna of Trifecta Capital Advisors, one of the top venture debt funds in India, explores the nuances of venture debt and what kind of startups and investors should consider this form of financing.
Explaining the need for venture debt, Khanna said that raising equity is not a perfect science. “You may have raised $10 Mn but find a little later that you are $2 Mn short. Venture debt can help you fill the gap”
If Sachin and Binny had taken some venture debt early in their career, they would be atleast $100 Mn richer each, Khanna said referring to the Flipkart founders.
5:30 PM
What are the investment trends that are really driving the startup ecosystem? Avendus investment firm co-head Karan Sharma is giving us a presentation comparing India’s investment scenario with other markets like China and SEA in an expert talk titled ‘The Trillion Dollar Indian Digital Opportunity’
One of the most prominent trend is that at a per-capita GDP of $2400, India is at an inflection point of its digital transformation, Sharma said .
The intricacies of India offer unique opportunities, Sharma concluded.
4:40 PM
India’s Policy Architecture for Innovation
An entrepreneur, advisor, columnist, and a software developer — Sharad Sharma — is delivering a deep-dive presentation on startup policy architecture, its impact in society and economy, and plans for the next decade.
4:20 PM
Indian startups have just started building connections with corporates. The topic of our current session is ‘The Corporate-Startup Connect’, and the aim is to get the views of corporates on the rise of startups.
This panel has Amit Shah, group president and head (marketing and corporate comm), Yes Bank; Digbijoy Shukla, head of startup ecosystem at AWS; and Gaurav Kanwal, South Asia head (SMB and channel sales), Adobe, and is being moderated by Murali Talasila, partner and innovation leader at PWC.
3:40 PM
The Rise Of The Soonicorns
Founders of three startups — Ather Energy, UrbanClap, Cleartax — will decode the DNA of Indian soonicorns, the impact they have created, and what lies ahead. Pallav Kaushish, VP, Marketing, at Inc42, is moderating the panel.
Talking about venturing into uncharted territory, UrbanClap’s Abhiraj Bahl, said that one can’t shy away from “heavy lifting” required in a startup. Whether it is fintech or logistics, founders have to focus on building a “full-stack experience”.
Ather Energy’s CEO Tarun Mehta weighed in with the example of his company, which had to change people’s perception about the benefits of using an electric scooter instead of an Activa, which is far more popular in India. “People are ready to pay 30%, 40% or even 50% more if you have value,” he said. “At Ather, we focused on the dash(board), touchscreen, and the experience of using the scooter and that has helped us a lot.”
3:20 PM
This next session is called ‘The Community Builders’ and is about shedding light on the role of startup community builders, their participation, and also aimed at identifying gaps that need to be bridged. The session is being moderated by IVCA president Rajat Tandon, with panelists Abhishek Gupta from TLabs, IAN co-founder Padmaja Ruparel, and T-Hub CEO Srinivas Kollipara.
“A lot of startups are being able to raise the first half-a-million or so but have trouble raising the next round of funding and that is the challenge for many startups,” Ruparel said.
Talking about picking the right investors, Abhishek Gupta joked: “Good humans attract angels!”
3:00 PM
Startup India — The Road So Far
One of the keynote speakers for The Ecosystem Summit, DIPP Secretary Ramesh Abhishek, is now giving a presentation on how the Startup India plan has helped in the growth of the Indian startup ecosystem in the last three years, the next steps, and beyond.
One of DIPP’s most important policy initiatives has been to fast-track patent applications, Abhishek said. This includes giving rebates in patent filing costs. Startups can now also self-certify themselves against laws, easing the compliance burden on them, he added.
Touching on the topic of easing regulations, Abhishek said the government has recognised that the investment landscape of the startup ecosystem is very different from traditional channels of funding. To address this new sector, the government has made 22 regulatory changes, including reducing the lock-in period for angel investors and increasing the limit for the maximum number of angel investors allowed in an angel fund, Abhishek said.
The DIPP secretary ended his presentation by encouraging all the founders and delegates present at TES to reconsider their preconceived notions about the government’s work, check government websites, and take advantage of the initiatives that are being rolled out for them.
2:00 PM
Delegates having lunch at TES 2018
We are almost halfway through TES. After six sessions covering diverse topics such as VC funding, unicorns, and the shift towards Tier II and Tier III cities, the speakers and delegates have taken a break for lunch. But stay tuned because we will be back in no time with more live updates from The Ecosystem Summit.
1:25 PM
After a fireside chat about the ecosystem between Inc42 CEO Vaibhav Vardhan and MakeMyTrip CEO Deep Kalra, which turned into a candid conversation on what it means to be an entrepreneur before and after the origin of the word “startup” and Kalra’s current take-home salary, we now have a panel called ‘The State & The Startups’.
For this session. we have Kerala electronics and IT secretary M Sivasankar talking to moderator Nakul Saxena, public policy director at the iSPIRT Foundation, on how the state government is engaging with startups.
“We have witnessed an unforeseen calamity recently, but that was the time we also came to know about many Kerala startups and their innovative services that are helping in rebuilding the state,” Sivasankar said.
Sivasankar also invited all the entrepreneurs, founders, and investors at the ecosystem conference to come join the party. “If you are not looking to Kerala, the loss is entirely yours,” he added.
12:50 PM
Inc42 CEO Vaibhav Vardhan and MakeMyTrip CEO Deep Kalra at The Ecosystem Summit
Inc42CEO Vaibhav Vardhan is now having a one-on-one chat with Deep Kalra, CEO of online travel aggregator MakeMyTrip.
Reflecting on MakeMyTrip’s journey in the last 18 years, Kalra said that one important thing that entrepreneurs and aspiring entrepreneurs need to keep in mind is not to rely on just a verbal agreement with investors.
“Two decades ago, the only quality that startup founders needed was stubbornness, even if people tell you that this is craziness,” Kalra said.
However, in the present time, as the customer becomes more confident about digital financial transactions, entrepreneurs face a completely different dilemma.
Elaborating on the topic, Kalra said that now there are so many companies chasing the same model. Then, why does one company stride ahead while others fall back or shut down? The difference comes down to execution, Kalra emphasised.
Execution eats strategy for breakfast
Drawing on the differences between the growth story of the Chinese and Indian startup ecosystems, Kalra said that the way the Chinese ecosystem is structured, big companies like Alibaba, Tencent, and Xiaomi have spawned a slew of smaller startups. Also in China, the traditional economy invested heavily in these startups at an early stage, which is rarely the case in the Indian startup ecosystem.
“Will we have Indian companies in India owned by Indians, or will it be all international companies? Flipkart is the latest example. We need to think about it, seriously,” said Kalra.
12:00 PM
The Ecosystem Summit is now in full swing with its second panel, ‘Bull & Bear Of India’s VC Investing’. The session is being moderated by 91Springboard co-founder Pranay Gupta, and has LightSpeed Venture partners Bejul Somaia and Sid Talwar, Avaana Capital founder Anjali Bansal, Ideaspring Capital managing director Arihant Patni, and Nexus Venture Partners co-founder Sandeep Singhal on the panel.
Indian startups are fast in adopting emerging technologies, which is not only solving unique problems but are also attracting both foreign and local venture capitalists to the Indian startup ecosystem.
Talking about scaling up and the relationship between startups and VCs, Bansal said that VC scalability depends on setting up formal systems and processes in place, along with developing the leadership qualities of the entrepreneur.
Somaia said that one of the biggest qualities of successful entrepreneurs is the ability to constantly make tradeoffs. For example, deciding between unit cost and scalability or speed and control.
Startups are never balanced, at least not the good ones, Somaia quipped.
Singhal said, “Today, you have role models for entrepreneurs to follow. So, now we see entrepreneurs who are more circumspect and knowledgeable.”
When the moderator asked the panelists which sector do they think the next Indian unicorn is going to come from, all the panelists said that they are bullish on the entire Indian ecosystem and the next big thing could be from any sector — be it logistics, education, or ecommerce.
Noting an interesting shift in the startup funding landscape, Talwar said that traditional companies and family offices are now investing in the ecosystem. Bansal jumped in to add that today there’s a new hybrid model where family offices are working along with VC funds to finance startups.
11:47 AM
The Ecosystem Summit Trivia: Currently, there are 26 unicorns in India. The country has more than 39,000 operational startups — risen from 7,000 in 2008 to 38,000 in 2015 — of which 31 soonicorns have the potential to join the billion-dollar list.
10:45 AM
The event has now moved on to its first panel for the day titled ‘How To Ride A Unicorn’.
Moderated by iSPIRT Foundation co-founder Sharad Sharma, the panel includes EKA Software CEO and founder Manav Garg, Info Edge founder Sanjeev Bikhchandani, Blackbuck founder Rajesh Yabaji, and Matrimony.com CEO Murugavel Janakiraman. The panel will focus on the factors responsible for the rise of India’s unicorns, and what more can be done to boost and foster this growth.
Murugavel Janakiraman said that one of the biggest challenges for upcoming startups is how to deal with disruptors. Giving the example of Matrimony.com, he said one way around this problem is to connect your business with the culture of the market you are targeting.
Talking about bringing fintech to the trucking business, Yabaji said that fundamental innovation in building a digital platform around the core business very important.
Summarising the essence of the startup mindset, Sharma said:
“Entrepreneurship is about addressing a messy problem in a new way.”
Garg said that platform thinking has to start at an early stage of forming the business. This will change the way you build the company and survive shifts in the market.
Bikhchandani emphasised that going forward, Indian startups will face international “goliaths” like Amazon and Google earlier on in their growth cycle. He added that one doesn’t need a lot of funding to be successful — what one needs is innovation.
“Successful businesses are built on deep customer insights,” said Sanjeev Bikhchandani
Taking a question from the audience about one of the delegates about scaling a small business, the panelists said that its okay to run a small business as long as you ask yourself two important questions: One, is your business sustainable, and, two, is it adding value to your customer?
10:20 AM
Mohandas Pai at the Inc42 The Ecosystem Summit
From being the CFO of Infosys to working with the government to improve the business ecosystem in India, TV Mohandas Pai has worn many hats in the private and public sphere. Today, he is addressing the audience at the ecosystem summit on the topic, ‘India 2025: The Indian startup ecosystem in 2025’. Pai, who is currently the chairman of private equity fund Aarin Capital, will look into the investment opportunities and startup challenges which will unfold as we grow as an ecosystem and country.
Talking about India’s growth story, Pai said that the only country that has outpaced India in terms of growth in the last 25 years is China and that is because when Mao Zedong came to power in China, he said, “Women hold up half of the heaven.” The disparity in education rates of women in India and China is one of the reasons that India’s growth has lagged, Pai said.
“We believe that by 2025 India will have 100,000 startups in the country,” TV Mohandas Pai said.
Pai also forecast that by 2025 India will have 100 unicorns.
Talking about India’s digital transformation, Pai said that in his opinion, India Stack is the greatest piece of software after Linux. In seven short years, it has gained 1.1 Bn registered users.
“We will go from a data poor to data rich nation in five years,” Pai added.
10:15 AM
Pallav Kaushish, VP, Marketing, Inc42, is giving a talk on what went into making the 400-page flagship report — The State Of The Indian Startup Ecosystem 2018. The report takes a data-driven and comprehensive approach to analysing the startup ecosystem. While the report aims to drive strategic decision-making in governance, investments, growth, and other core pillars, it is also an indicator of things to come.
10:10 AM
Minister of Commerce and Industry Suresh Prabhu is giving a keynote address on the need for ecosystems and startups to develop together. Underlining the importance of timing in the success of startups, Prabhu said that while ecosystems are important, startups will still have some challenges which they must face themselves.
“We will provide all types of support to startups, which they need, at the right time,” said Suresh Prabhu.
Prabhu also emphasised that startups can’t grow in isolation, they need links to corporates and economic growth in the society to flourish. He also said that one big initiative in this area is to promote ease of doing business policies not just at the national level but in every district. He ended his talk with wishing all entrepreneurs and startup players the best in their endeavours.
9:50 AM
Suresh Prabhu, Minister of Commerce & Industry and Civil Aviation; Hiro Mashito, Director, M&S Partners; TV Mohandas Pai, Chairman of PE fund Aarin Capital; and Inc42 founders Vaibhav Vardhan and Pooja Sareen kickstarted The Ecosystem Summit with the launch of Inc42‘s flagship report — The State Of Indian Startup Ecosystem 2018.
RDGlocal, lead by Mr. Youngfu Yu, said it has plans to invest $100 Mn in the Indian social media and content space over the next two years.
Speaking at Inc42’s The Ecosystem Summit about RDGlocal’s plans, Amit Sharma, vice president of RDGlocal, said that the fund is aimed at building an ecosystem of content assets which can cross-leverage each other for growth.
RDGlocal is a collaborative international innovation platform focused on consumer-focused mobile internet businesses. The fund aims to make these content-specific investments over the next two years.
Sharma said the fund has already invested in Welike, a social media platform in India, which has content available in seven languages already.
On the content side, the fund plans to make investments across sub-verticals including both short and long form video content and plans to engage content producers, influencers, key opinion leaders, content brands, news media, etc.
RDGlocal was founded and is led by veterans of the Chinese Internet giant Alibaba. The Chairman, Mr. Yongfu Yu, has been a key leader in the Alibaba ecosystem for the last several years, leading multiple businesses, including Autonavi, Alimama, and Alibaba Entertainment Group. Mr. Yu was also the founding member of the popular Chinese web browser company UCWeb before joining Alibaba.
Mr. Jerry Li, a part of the GP team, has been with the Alibaba group and led multiple businesses within the group, including Alibaba Literature and Alibaba Pictures; Mr. Li also founded one of the largest social media platforms in China.
Ms. Jessica Wong, who is also on the GP team of RDGlocal, has been investing in the Indian market for the more than three years and has successfully built and run two VC funds — Cyber Carrier and Ganesh Ventures.
Given its background, RDGlocal brings in significant strategic value for its investee companies. The fund acts as a bridge for ambitious Indian entrepreneurs who want to access the Chinese startup ecosystem and stakeholders, so that they can utilise cross-border resources, exchange learnings, and achieve market synergies. Moreover, the investee companies can leverage the expertise of the core team to evaluate their business strategy and get guidance. RDGlocal can also help its investee companies to explore other markets given their network.
RDGlocal has set up offices in Beijing, Delhi, Hong Kong, Seattle, and Guangzhou. The team has already started evaluating startups and intends to close multiple deals within this fiscal year.
Engineer.ai, which uses Artificial Intelligence to help small and mid-sized organisations build their own bespoke software (custom or tailor-made software), has raised a Series A investment of $29.5 Mn, led by Lakestar and Jungle Ventures. The funding round also saw participation from DeepCore — Softbank’s AI-focussed investment fund.
Founded by Sachin Dev Duggal and Saurabh Dhoot in 2012, Engineer.ai is a global company with split headquarters in Los Angeles and London, supported by offices in Delhi and Tokyo. The startup was formerly known as SD Squared and was rebranded to Engineer.ai. in June 2018.
With over $24M in gross revenue and customers that include BBC, Virgin Group and the San Francisco Giants, Engineer.ai uses AI to allow anybody to build a custom software for their company using a drag-and-drop project builder and a library of frequently used code.
The company is set to cross the $100 Mn revenue mark before the end of 2020.
Engineer.ai’s flagship product ‘Builder’ is an AI-powered software assembly line that breaks projects into small building blocks of re-usable features that are then customised by the programmers and IT professionals on the company’s platform.
“We created Engineer.ai so that everyone can build an idea without learning to code,” said Sachin Dev Duggal, founder of Engineer.ai. “The capital comes at a time of rapid growth and will propel the platform into the mainstream, allowing Builder to open the door for entire categories of companies that could not consider it before,” he added.
The company provides a fully integrated service to its customers, from an extended warranty to the CloudOps marketplace, that provides access to everything the custom software might need (hosting, microservices, marketing, etc.).
“Software is the centre of every business today and the market has been waiting for a solution that eliminates technical barriers to build software so that everyone can engage in the new economy,” said Manu Gupta, Partner at Lakestar.
For now, Engineer.ai is focussing on the APAC region mainly India and is looking to expand to MENA, and South East Asia including China.
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