It started with a tweet on July 8, 2024, when Ola founder and CEO Bhavish Aggarwal announced the launch of Ola Maps for developers. The CEO also officially announced that Ola Cabs was moving away from Google Maps, the company’s mapping partner until then. 

Incidentally, this came on the heels of Aggarwal’s tussle with Microsoft-owned LinkedIn and the company migrating away from Microsoft’s cloud solution Azure. So the move from Google to Ola Maps naturally attracted a lot of attention on social media. 

Since then, Ola Maps has been in the news for various reasons. 

For one, Aggarwal claimed that Google Maps reduced prices for certain core APIs by up to 70% in response to the Ola Maps launch.

But Developers that use the Google Maps API told Inc42 that Google had already announced a price reduction a few months before Aggarwal tweeted about Ola Maps. “We knew about it for at least a month before the announcement. Google, being a big company, likely planned it further in advance,” said the founder of a route planning and optimisation startup.

Then, Ola was hit by a legal notice from listed mapping major MapmyIndia for alleged data theft and reverse engineering Ola Maps by duplicating MapmyIndia APIs. Soon after, Aggarwal dismissed this notice as being opportunistic. 

But out of nowhere, India’s mapping services space has become a hotbed of competition, controversy and allegations. Ola and Aggarwal are at the centre of this frenzy, and the CEO is supremely confident that Ola Maps will be the next big thing from the house of Ola.  

Sources told Inc42 that the CEO is keen on spinning off Ola Maps as a separate entity and Aggarwal has eyes on creating yet another unicorn, after taking Ola, Ola Electric and most recently Krutrim to the $1 Bn valuation club. 

“A spin-off is on the cards[A few years down the line]; however, at present, the company needs a lot of nurturing from the Ola ecosystem. Once the product nears maturity and the brand achieves a sizable clientele outside the ecosystem, it will be something to look into,” a senior employee working on the platform told Inc42. 

But does Ola Maps even have a shot in this market, where the incumbents have decades of expertise and experience? 

Ola Maps Joins India’s Digital Mapping Frenzy

For the past 18 months, Ola Maps has been developed by Ola Cabs’ parent company ANI Technologies, building on the 2021 acquisition of Pune-based startup GeoSpoc. 

Unlike Ola Krutrim and Ola Electric, which were independent entities from inception and shared the Ola brand name and the company’s resources, Ola Maps is currently part of Ola Cabs’ parent company ANI Technologies.

This is why there is some speculation about Ola spinning off Ola Maps into a separate entity and offering it to developers and other product startups as an API-based service. Aggarwal on X mentioned that Ola Cabs has been spending around INR 100 Cr on third-party mapping services.

It will be interesting to see how Ola differentiates itself from the host of players that make up the mapping market. Although Google Maps and MapmyIndia are the two most dominant players, there are others such as Apple Maps, Dutch giant HERE Technologies, TomTom, MapBox, OpenStreetMaps among others. 

The digital maps and location intelligence services market consists of digital maps services, navigation solutions and telematics for business as well as consumer applications. And most of these companies have products that cater to both B2B and B2C or either of these verticals.  

The opportunity in the digital mapping space is very large. For instance, MapmyIndia’s operating revenue nearly doubled in the past two fiscal years from INR 200 Cr in FY22 to INR 379.4 Cr in FY24.

It is hard to estimate how much Google Maps is earning from India, as the tech giant does not disclose numbers for Google Maps nor its business in India. We do know that most service providers that operate at scale rely on Google Maps.

Swiggy and Zomato, for instance, would be contributing significantly to Google Maps revenue in India, given the millions of orders these platforms process daily for food delivery and quick commerce. Uber India too is a major customer for Google Maps, and Google Maps is pre-installed on millions of Android devices. 

It is hard to fight dominance of this scale, but MapmyIndia has looked to do that through customer acquisition and leading an antitrust battle with Google Maps, as we have written about in the past. 

For context, Google Maps entered the Indian market in 2007, a decade after MapmyIndia’s first product. Last year, MapmyIndia CEO Rohan Verma told Inc42 that MapmyIndia offers a superior product thanks to speed limit indicators, pothole indicators, 3D junction view (for exits and flyovers), several of which are still missing from Google Maps.

However, dethroning Google is no easy task, particularly because of its extensive tech industry network, deep pockets and Android’s dominance in the smartphone market due to which most Android devices come preloaded with Google Maps. 

For MapMyIndia and other majors in the space, it’s the B2B market which includes ride-hailing services, automobile, enterprise solutions, and delivery services that’s been the key addressable market.  

MapMyIndia claims to have captured over 80% of the connected vehicle market, where its apps and devices are installed on-board by the OEM. It also claims to be working with distribution companies, particularly in the food and beverages space. 

So the question is where can Ola even compete in such a market, where two large players already have deep roots. 

Ola’s Maps Journey From 2021

Ola’s journey into the mapping world began after the Indian government changed the guidelines for geospatial data in early 2021. The guidelines restricted foreign companies to a 1-metre accuracy and mandated the use of APIs for such companies from authorised domestic licensees. No such restrictions are applicable for Indian companies. 

The 2021 Guidelines liberalised the entire approach to how an entity could collect the mapping data. Before, it was heavily guarded. And, one needed to have a license and approval from the Indian government to enter the mapping data / streetview data collection.

“This was a major reason why Google could not be directly involved in mapping data collection in India before 2021. Instead, it has had to partner with entities such as Tech Mahindra to collect data for mapping solutions,” a former India-based Google Maps developer told Inc42. 

It was in this India-first milieu that Aggarwal set the roadmap for Ola Maps after the GeoSpoc acquisition. 

Aggarwal’s thesis was that domestic map solutions are critical to democratise access to digital services for all Indians, especially outside the metros. 

He also said that multimodal transportation options such as drones, autonomous vehicles or other new-ge connected vehicles will require more detailed geospatial data, including high-definition and three-dimensional (3D) maps. 

In its first Maps blog, Ola claimed that existing maps do not address challenges such as inaccuracy, inconsistency, varying street names, frequent changes in road networks, non-standardised streets, potholes, and road quality issues. 

Some of these problems are incidentally also MapmyIndia’s USP as Verma told us in January last year. 

But Ola Maps does offer a big upside for Aggarwal and Ola’s many verticals:

1. Cutting Costs: The company will no longer have to spend INR 100 Cr on mapping APIs and SDKs 
2. New Revenue Stream: The in-house mapping solutions is a new revenue stream for Ola 
3. Data Ownership: Ola Maps allows the company to have complete control over user location data, which feeds into other Ola businesses such as ride-hailing, Ola Electric as well as any other verticals launched by the company, including Ola’s recent push into food delivery with ONDC

Of course, competition is beneficial for the entire ecosystem, since this will create a race to offer more features at better prices. 

But building a mapping platform is no easy task. During an interaction with Inc42, a few weeks back, MapmyIndia CEO Verma said, “It is a huge infrastructural task to create a solid foundation of accurate maps based on ground reality for a large country like India (3.2+ Mn sq km to 6.6 Mn sq km!), and then an even more herculean task to maintain and keep the maps updated as the landscape changes.”

According to him, it is very hard to firstly build and maintain maps, and secondly make it into a viable business. “Many players have tried and failed after a few years,” Verma said. 

Ola Maps, which first appeared on the company’s EVs and inside Ola Cabs, is now being offered to developers.

For a moment, let’s put aside the controversy around MapmyIndia’s legal notice to Ola and see how the latter claims to have built Ola Maps.  

As per the company’s statements, it acquired data from Open Street Maps under a licence agreement, as well and from government sources, while also deploying sensors in some Ola Cabs and across the data operations fleet such as cameras, radar, and LiDAR. 

By processing this data, Ola said it developed a suite of APIs and SDKs for B2B use cases. Ola claimed that its maps platform ingested more than 5 Mn messages per second from various sensors and telemetry sources. The petabytes of data is collated, normalised, anonymised, and stored in a data lakehouse. Data streams from various sources are further divided into pipelines to collect relevant data for training AI models, analytics, and data ops for maps. 

The final output is stored in map databases for tiles, places, and routes systems. Ola Electric, meanwhile, has shelved its electric project which was unveiled in 2022, so for now, Ola will instead be relying on its EV two-wheelers and its fleet of cabs for further data collection. 

Suvonil Chatterjee, the chief technology and product officer of Ola Electric, said in a tweet that AI is at the heart of Ola Maps. The company leverages natural language processing for contextual searches, real-time traffic prediction, dynamic routing algorithms, and automated map updates, Chatterjee said. 

What Ola Can Learn From Apple Maps

While the Indian ecosystem has largely applauded the launch, some maps users pointed out bugs and shortcomings such as Ola’s reliance on Google Autocomplete API, routing issues and even about Ola using SDKs from other mapping solutions such as MapBox.

“The APIs offered by Google Maps are simply much more extensive, but the start by Ola Maps is promising. However, with Ola Maps currently being constrained to the Ola ecosystem, most issues are still not public as drivers rarely report them,” according to a founder of location-based services startup.

Moreover, some APIs are difficult to build in terms of accuracy and seamlessness and require multiple datasets to work together. Take for instance, Google Maps’ Places APIs. Industry insiders believe this is especially difficult to develop, because Google relies on high-quality data from Search and other products. This is partly why Google’s Maps APIs are so feature-rich. 

In fact, mapping platforms have transformed into super apps / super platforms incorporating a slew of vertical requirements. Users can directly reserve a table using Google Maps or seek appointments with a doctor or make inquiries about what products a nearby kirana store has in stock. 

MapmyIndia’s consumer app Mappls has partnered with ONDC to incorporate some of these features and more into its products, and the company has also tied up with wearables maker boAt to introduce some features for smartwatches, a category where devices running Google Maps and Apple Maps are typically more expensive than boAt’s smartwatches. 

Apple Maps has also built such features into its APIs but not all of these are available in India. In the US, where Apple is in a much more dominant position, these APIs are more feature-rich. 

What these feature-rich mapping solutions tell us is that mapping apps are no longer just about directions or finding the fastest route between two points. Maps apps are moving towards super apps in some ways. 

Apple’s example is most apt for Ola. Apple Maps was heavily criticised at launch in 2012 for having poor accuracy and mislabelled information. It took the company more than a decade to come close to Google in terms of service quality and features. 

It wasn’t easy for Apple, but having a revenue-generating machine such as the iPhone did help in staying the course. Does Ola have the tenacity that Apple showed? 

For Ola to directly take on Google Maps or Apple Maps, it is critical to add some of these consumer-friendly features, since they can have a snowball effect and bring more B2B customers  on board as well. For Ola Maps, the arduous task begins now. 

Ola Maps might well find itself in the unicorn club if Aggarwal decides to spin it off, but that will still be a valuation game. Dethroning Google, MapmyIndia and even Apple Maps won’t be as simple as going from point A to point B.

[Edited by Nikhil Subramaniam]

The post A Long Road For Ola Maps: Can Bhavish Aggarwal Dethrone Google Maps, MapmyIndia? appeared first on Inc42 Media.

The Reserve Bank of India (RBI) is pulling out all stops to combat the rising incidents of frauds and has now proposed tighter norms related to the onboarding process of Aadhaar-enabled touchpoint operators. 

The central bank has streamlined the guidelines and released a draft version of it.

As part of the move, banks are mandated to carry out due diligence on all Aadhaar-enabled Payment System (AePS) touchpoint operators that are being onboarded by them. 

This due diligence is as per the customer due diligence procedure laid out in RBI’s master directions on KYC since 2016.

Besides this, the banks will also carry out an update of KYC in cases where the AePS touchpoint operator failed to perform any financial transactions in the six months at length. 

Not to mention, the acquiring bank has to monitor all activities of AePS touchpoint operators regularly besides setting operational parameters. Notably, respective transaction limits will also be set for AePS touchpoint operators in accordance with their risk profiles. 

It is pertinent to note that the draft guidelines are open to comments and feedback from industry participants till August 31.

This development follows RBI Governor Shaktikanta Das’s statement last month outlining that the regulator would enhance the robustness of AePS. 

AePS is a bank-led model which allows online interoperable financial inclusion transactions at PoS (MicroATM) through the Business correspondent of any bank using the Aadhaar authentication. 

AePS enables different types of transactions including cash deposit and withdrawal, balance enquiry and mini statement, Aadhaar to Aadhaar fund transfer, eKYC, tokenization and aadhaar seeding status, among others. 

Notably, inputs like bank name, aadhaar number and biometrics captured during enrolment are the only inputs required to make a transaction under AePS.

Signzy’s cofounder and CEO Ankit Ratan said, “This initiative aims to bolster customer trust and ensure the safety of transactions, particularly in rural areas where digital literacy may be lower.”

“By implementing ongoing due diligence and monitoring, along with tailored transaction limits based on risk profiles, the RBI is proactively addressing potential fraud risks. Additionally, the RBI has emphasized the importance of robust cybersecurity measures and effective management of third-party risks, urging banks to combat digital fraud and raise customer awareness.”

Earlier, the Reserve Bank of India (RBI) in its annual report for the fiscal year ended March 2024 outlined that the number of online frauds in the country surged 334% year-on-year (YoY) to 29,082 in the financial year 2023-24 (FY24) as against 6,699 in FY23.

This comes at the heart of RBI as well as the government taking proactive steps to crack the whip on online frauds. In April, the Centre held deliberations with fintech startups and law enforcement agencies to collaborate and address challenges related to digital financial fraud.

In the same month, it was reported that the Ministry of Home Affairs was working with SBI and some telcos to develop a solution to alert about stolen one-time passwords (OTP) to combat phishing attacks.

In February, markets regulator SEBI also issued an advisory that alerted investors against practices employed by fraudulent trading platforms to lure customers such as online courses, seminars and mentorship programmes.

Additionally, the RBI was also said to be planning to set up the Digital India Trust Agency to check illegal lending apps, earlier this year.

The post RBI Proposes Tighter Norms For Aadhaar-Enabled Payment System Operators To Curb Frauds appeared first on Inc42 Media.

Fino Payments Bank posted a profit after tax (PAT) of INR 24.27 Cr for the quarter ended June 30, 2024 (Q1 FY25), up 29.7% from INR 18.7 Cr in the year-ago period.

However, the payments bank’s PAT declined 3.7% quarter-on-quarter (QoQ) in Q1 FY25 from INR 25.21 Cr in Q4 FY25.

Revenue from operations jumped 25.4% to INR 436.86 Cr during the quarter under review from INR 348.31 Cr in Q1 FY24. On a QoQ basis, operating revenue was up 8.8%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 31.4% to INR 53.2 Cr from INR 40.5 Cr in Q1 FY24. However, it contracted 1.8% QoQ from INR 54.2 Cr in Q4 FY24.

The company said it opened more than 68,000 digital accounts in the reported quarter and facilitated 57 Cr UPI transactions.

The current account savings account (CASA) segment contributed INR 93.6 Cr to Fino’s net income in Q1 FY25.

Meanwhile, the payments bank earned INR 66.8 Cr from its digital payment services vertical during the period under review.

The domestic money transfer (DMT) segment turned out to be the biggest money maker for the payments bank, adding INR 112.5 Cr to its top line.

During the June quarter of FY25, Fino Payments Bank saw its merchant network rise 25% YoY to 18.1 Lakh. Meanwhile, average deposits surged 37% YoY to INR 1,699 Cr in Q1 FY25.

Ahead of the earnings announcement, shares of Fino Payments Bank closed 1.3% higher at INR 321.6 apiece on the BSE on Wednesday (July 31). 

Commenting on the Q1 results, Rishi Gupta, CEO and managing director of Fino Payments Bank, said, “Our new vertical ‘digital payment services’ is growing on a profitable basis and giving the necessary impetus to our TAM (transaction, acquisition and monetisation) strategy..”

Going forward, the payments bank will focus on moving up the customer value chain, diversification and innovation, Gupta added.

The post Fino Payments Bank Q1: Profit Jumps 30% YoY To INR 24.2 Cr appeared first on Inc42 Media.

Fintech unicorn BharatPe has secured a debt funding of INR 85 Cr (around $10.1 Mn ) from Trifecta Venture and InnoVen Capital through issuance of non-convertible debentures (NCDs).

The company’s board issued 500 Series E1 secured, unlisted, unrated and redeemable debentures with a face value of INR 10 Lakh each and 3500 Series F1 debentures at a face value of INR 1 Lakh each to raise INR 85 Cr, as per regulatory filings.

At INR 50 Cr, Trifecta Venture led the debt funding round while InnoVen Capital invested the remaining INR 35 Cr.

Entrackr reported the development first.

Notably, this is the second instance where BharatPe has raised debt funding this year. In January, the Peak XV-backed startup secured $100 Mn in debt from InnoVen Capital and Credit Saison.

At the time, it was reported that InnoVen Capital was looking to invest $60Mn-$70 Mn in BharatPe.

The latest INR 35 Cr debt infusion by Innoven Capital appears to be part of that deal.

It was also reported earlier that Nalin Negi has been promoted as the CEO of BharatPe. Negi was appointed as interim CEO and CFO of the company following Sameer Sohail’s exit in January 2023.

Recently, BharatPe ended its five-year long legal dispute with PhonePe over the use of the trademark with the suffix ‘Pe’ in their brand names. 

Earlier this year, BharatPe rolled out an ‘all-in-one’ payment device ‘BharatPe One’ that integrates point-of-sale (PoS), QR code scanner, and speaker.

BharatPe widened its net loss to INR 926.9 Cr in the financial year 2022-23 (FY23), up 12% from INR 828.6 Cr in FY21. 

Revenue from operations jumped 125% to INR 1,028.9 Cr in FY23 from INR 456.8 Cr in the preceding fiscal.

The post BharatPe Raises INR 85 Cr Debt From Trifecta And InnoVen appeared first on Inc42 Media.

SEBI chairperson Madhabi Puri Buch has said that the markets regulator will ensure adequate oversight to prevent a “Paytm-type contamination”.

“We will not allow a Paytm-type of contamination in our market. We all saw what happened in Paytm. Now, because in the banking system, there is no KRA (KYC Registration Agency) type system. So, the problem of Paytm stays in Paytm. It doesn’t contaminate other banks,” Buch said.

It is pertinent to note that SEBI mandates uniform KYC by all SEBI-registered intermediaries. KRAs provide for centralised storage/ digitisation of the KYC records in the securities market.

“But if we allow Paytm to come into our system with no KRA, and it contaminates the whole system, how can we allow that? We will always have our KRA sitting in the middle to make sure things are validated, otherwise you can have one mischievous player come in and contaminate the whole system. We will not allow that,” the SEBI chairperson added.

Buch’s sharp criticism of Paytm came in the backdrop of the Reserve Bank of India’s crackdown on Paytm Payments Bank Ltd (PPBL) for flouting KYC norms and non-compliance with rules. The central bank ordered a number of restrictions on PPBL, including barring it from taking deposits or credit transactions or top ups in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards.

At the time, a number of reports said that the RBI took the action against Paytm due to lapses in its KYC processes.

However, Paytm’s troubles didn’t end with the RBI’s actions. In March, the Financial Intelligence Unit-India (FIU-IND) also slapped PPBL with a fine of INR 5.49 Cr for skirting anti-money laundering laws.

According to the finance ministry, PPBL allowed some entities to route illegal activities’ proceeds through its accounts.

Besides, Paytm has also been under SEBI’s scrutiny. It received a show cause notice from market regulator SEBI in relation to the 2.1 Cr employee stock options (ESOP) granted to the company’s founder and CEO Vijay Shekhar Sharma in the fiscal year ended March 2022 (FY22).

Earlier this month, Paytm also got an administrative warning letter from SEBI over related party transactions with PPBL in FY22, which were conducted without due approval of either the audit committee or the shareholders.

The post Won’t Allow ‘Paytm-Type Contamination’ In Market: SEBI Chief appeared first on Inc42 Media.

The Indian crypto ecosystem has had a tough couple of years due to various factors like regulatory uncertainty, heavy taxation stance adopted by the central government, a raging funding winter, negative press on account of the collapse of industry bellwether FTX, among others. 

Already under heavy scrutiny by users and authorities alike, the Indian crypto ecosystem was in for a rude shock when reports surfaced earlier this month that hackers, in a major breach at WazirX, decamped with $234.9 Mn worth of crypto tokens.

While the exchange’s many users were suddenly saddled with lost crypto tokens, a sharp criticism of WazirX’s handling of the entire episode came in from its competitor CoinDCX cofounder and CEO Sumit Gupta. 

In a post on X on July 29, Gupta said, “Hate to be saying this, but the way WazirXIndia is handling this entire situation isn’t community first and this IMO won’t go down well for them. This sadly is also hurting the other ecosystem participants”. 

But, his grouse with WazirX was about a bigger issue – the latter’s plan to make its customers absorb 45% of the losses. Calling the proposal “utter nonsense”, Gupta emphasised that ideally WazirX should absorb the losses rather than throwing the burden on its customers. 

Several social media users too chimed in on the debate and expressed displeasure with WazirX’s handling of the crypto heist. One user said that the exchange was prioritising profits while trying to escape answerability and accountability for the mishap.

The backlash came a week after WazirX suffered what was called the biggest cyberattack on any Indian crypto exchange till date as hackers stole funds equivalent to 45% of total user funds on WazirX.

As the news spread like wildfire, the crypto startup went on a damage control mode and said that the security breach impacted one of its wallets ‘Safe Multisig’ on the Ethereum network. 

For the uninitiated, a multisig wallet is a type of cryptocurrency wallet that requires multiple private keys to authorise and complete transactions. 

Following this, WazirX ‘temporarily’ suspended all trading activities on its platform as it looked to track the missing funds. 

While the users were pinning their hopes on the exchange stepping up efforts to trace the funds, it was WazirX cofounder Niscal Shetty’s comments about a ‘socialised loss’ strategy that unleashed a volley of criticism online. 

What Is The Socialised Loss Strategy?

Under fire and with no headway made in recovering funds, Shetty took to X to conduct a poll to outline two paths forward for the exchange following the breach. He cited two options – ‘legal recourse’ or ‘social loss’.

Then, in a blog post on July 27, WazirX said that in light of the recent cyberattack on the platform, it was implementing a “socialised loss strategy to distribute the impact across all users equitably”.

The company has proposed a 55-45 approach to facilitate management of the remaining user funds, where 55% of user crypto assets will be made available for trading or withdrawals depending upon the option selected by the user. 

Meanwhile the remaining 45% will be converted to Tether-equivalent tokens and locked until WazirX recovers the stolen assets.

The exchange has provided two options to its customers:

• Option A: Under this, users can trade and hold their crypto assets with priority for recovery efforts, but won’t be able to withdraw funds. If they want to start withdrawing their assets later, they can switch to Option B. However, in this case, they will lose priority in the recovery process.
• Option B: This will let users trade and withdraw their assets, but recovery efforts will focus on those who chose Option A first. Customers choosing this can switch to Option A anytime before making any trades or withdrawals.

 Explaining further, WazirX said that users with 100% of their tokens in the ‘not stolen category’ will only be able to trade or withdraw 55% of their crypto assets. The company said it would deduct the tokens to rebalance the portfolio of users who lost more than 45% of their crypto assets in the heist.

The value of the unlocked tokens (55%) will be calculated based on the average prices of CoinMarket and select global exchanges as of July 21, 8:30 PM, the day WazirX halted withdrawals on the platform.

Following the backlash, the exchange said that the poll is a preliminary step to understand the opinions of the users and is not “legally binding upon the users or the WazirX platform”. 

While the poll is still open till August 3, it is important to trace the chronology of events that led up to the current fracas. 

Tracing The Post-Hack Timeline

While the cybersecurity incident took place on July 18, WazirX, right afterwards, announced a bounty programme and offered a prize of $23 Mn to help recover the stolen $230 Mn funds. 

While touting the company’s supposed commitment to “transparency and collaboration”, Shetty said that the three-month long bounty programme was open to further extension based on the progress of the recovery.

Additionally, the company also announced that it was willing to offer rewards of up to $10,000 worth of USDT (stablecoin) to white-hat hackers for providing actionable intelligence that leads to the freezing of the stolen funds.

Even as the crypto exchange called on blockchain forensics experts and cybersecurity professionals worldwide to join the mission, the story soon took a different turn altogether as it launched a preliminary probe into the cyber attack.

In its early probe, the company said that the attack likely originated from digital asset management platform Liminal’s infrastructure as the hackers bypassed the latter’s final verification step.

However, Liminal dismissed the findings, saying that the “incident originated from an external source”.

“… Our initial assessment indicates that Liminal’s platform, infrastructure, wallets, and assets remain secure… As a wallet infrastructure support platform, we emphasise that this incident originated from an external source, underscoring the crucial need for comprehensive security measures across platforms,” Liminal said at the time.

Just as the company was grappling with the fallout of the hack, a new angle emerged in the case. US’ Federal Bureau of Investigation (FBI) reportedly reached out to the cryptocurrency exchange to probe the nature of a cyberattack. 

While the FBI reportedly hinted that the hack allegedly involved unnamed North Korean hackers, Shetty outright claimed that Lazarus Group was likely behind the incident. 

Lazarus, alleged to be backed by the North Korean government, is known for carrying out some of the world’s largest crypto exchange attacks in the past. 

Later on July 29, external threat landscape management platform CYFIRMA claimed that the North Korea-backed hacker group indeed was behind the security breach. It linked the attack to North Korean intelligence service Reconnaissance General Bureau (RGB).

According to CYFIRMA, close to $235 Mn were lost in crypto assets, including $96.7 Mn worth of Shiba Inu tokens, nearly $52.6 Mn of Ether coins, $11 Mn of Matic tokens and nearly $7.6 Mn of Pepe tokens. 

“The threat actor has already swapped a number of these tokens for Ether using a variety of decentralised services, an expected initial step of a typical laundering process,” added CYFIRMA. 

Amid all this, WazirX has sought help from its former partner Binance for bailing out the customers affected by the hack. 

While it remains to be seen whether WazirX can emerge from this row successfully and recover back the funds, the cybersecurity incident has raised questions about the safeguards implemented by crypto exchanges. 

Additionally, the incident could also have an adverse bearing on the larger crypto landscape.

The post Crypto Heist: Here’s Why WazirX’s Socialised Loss Strategy Is Drawing Controversy appeared first on Inc42 Media.

Homegrown cryptocurrency exchange CoinDCX has elevated Mridul Gupta as its founding partner. 

Gupta, who joined the company as its chief operating officer in 2021, will now helm on meeting growth targets, international expansion, team building and driving profitability. 

Besides, he will also continue to oversee the Indian market while strengthening CoinDCX’s product portfolio, marketing, partnerships and operations.

“We will continue to innovate simple investment & trading platforms for retail users and build tailored solutions. My vision is to transform CoinDCX as the most loved crypto brand,” he said.

It is pertinent to note that Gupta was at the forefront in developing compliant crypto investment and trading products.

Chiming in, cofounder Sumit Gupta said, “As we scale up, shoring up revenues and launching new geographies will be key. Mridul’s experience in launching operations across new geographies and turning them profitable will help CoinDCX transform to the next level.”

The appointment coincides with CoinDCX’s recent acquisition of BitOasis, a virtual assets trading platform based in Dubai. This marks CoinDCX’s entry into the Middle East and North Africa (MENA) market.

Founded by Gupta and Neeraj Khandelwal in 2018, CoinDCX claims to have a user base of over 1.4 crore. It offers easy access to Web3 experiences and democratise investments in virtual digital assets with user safety and security.

CoinDCX became the country’s first crypto unicorn in 2021 after raising $90 Mn in Series C from Facebook cofounder Eduardo Saverin’s B Capital Group, Coinbase Ventures, and others.

It counts Pantera, Steadview Capital, Kingsway, Polychain Capital, B Capital Group, Bain Capital Ventures, Cadenza, Draper Dragon, Republic, Kindred, and Coinbase Ventures among its investors.

The post CoinDCX Promotes Mridul Gupta To Founding Partner appeared first on Inc42 Media.

Fintech SaaS startup Zaggle’s consolidated profit after tax (PAT) surged 716% to INR 16.73 Cr in the quarter ended June 30, 2024 (Q1 FY25) from INR 2.05 Cr in the year-ago period due to strong growth in its business.

However, PAT declined over 12% on a quarter-on-quarter (QoQ) basis from INR 19.16 Cr.

Revenue from operations zoomed 113% to INR 252.2 Cr in Q1 FY25 from INR 118.4 Cr in the corresponding quarter last year. However, it declined 7.7% on a QoQ basis from INR 273.37 Cr.

The enterprise tech startup attributed the year-on-year (YoY) increase in its top line to strong demand for its accounts payable platform Zoyer and credit card bundled solutions. 

Zaggle’s reported EBITDA grew 181.8% to INR 22.43 Cr during the quarter under review from INR 7.96 Cr in Q1 FY24.

Meanwhile, total expenses surged over 100% to INR 233.96 Cr in Q1 FY25 from INR 116.94 Cr in the year-ago quarter.

The biggest expense was the cost of point redemption/ gift cards, which nearly doubled to INR 110.4 Cr in Q1 FY25 from INR 57.9 Cr in Q1 FY24.

In Q1 FY25, Zaggle spent INR 14.1 Cr towards employee benefits expenses as against INR 13.9 Cr in the year-ago period.

The startup trimmed its ESOP expenses to INR 3.14 Cr in Q1 FY25 from INR 5.84 Cr in Q1 FY24. Zaggle said it expects its total ESOP expenses to be around INR 7-9 Cr in FY25.

Meanwhile, finance cost declined to INR 2.05 Cr during the quarter under review from INR 4.41 Cr in the year-ago quarter and INR 3.79 Cr in the preceding March quarter. The startup attributed this to prepayment of debt post its IPO.

Zaggle listed on the stock exchanges in September last year at INR 164 per share. Founded in 2011, the startup provides a spend management and corporate employee benefits platform. It helps businesses automate their accounts and issue prepaid cards, in partnership with banking partners, to reward their employees.

Meanwhile, in a separate exchange filing on July 30, Zaggle said it has allotted more than 1.24 Lakh additional stock options under Zaggle Employee Stock Option Scheme 2022 (Zaggle ESOP 2022) upon exercise of the vested options.

Ahead of the earnings announcement, shares of Zaggle ended today’s trading session almost flat at INR 335.05 apiece on the BSE.

The post Zaggle Q1: Profit Surges Over 8X YoY To INR 16.7 Cr, Revenue Jumps 113% appeared first on Inc42 Media.

Mumbai-based trade financing startup Vayana Network is raising $20 Mn (INR 170.8 Cr) in its Series D funding round. 

As per the startup’s filing with the Ministry of Corporate Affairs (MCA), the round is being led by new investor SMBC Asia Rising Fund, which is infusing around INR 62.6 Cr.

The round will also see participation from Jungle Ventures, Chiratae Ventures, International Finance Corporation (IFC), Deep Financial, among others. 

Inc42 has learnt from sources that this is a tranche of the startup’s ongoing Series D funding round. 

Post the allotment, SMBC Asia Rising Fund will hold a 3.25% stake in the startup, while IFC will own 5.66%. 

As per Inc42’s calculations, the startup will be valued at around $240 Mn in this funding round. 

A query mail sent to Vayana Network didn’t elicit any response till the time of publishing this story. The article will be updated on receiving a response.

The latest development comes almost two years after Vayana Network raised INR 140 Cr ($15 Mn) in its Series C funding round. This investment came almost on the heels of the startup raising $38 Mn funding from Chiratae Ventures, CDC Group, and Jungle Ventures.

Founded in 2009 by Ramaswami Iyer, Vayana Network is a B2B trade financial intermediary which connects SMEs and corporates with financial institutions for low-cost access to trade loans.

Vayana Network claims to have enabled finance of over $10 Bn, including over a billion dollar of finance through B2B card flows to over 1.5 lakh MSMEs for over 1,000 supply chains in 25 different sectors. The startup connects over 1,000 corporates and their trade ecosystems to provide digital, convenient, and affordable access to credit for their payables and receivables. 

The startup has a presence across 600 cities and 1,400+ pin codes in India and 20 countries across the globe. It is also a GSP (GST Suvidha Provider) and provides its services to numerous corporates and lakhs of SMEs.  

Overall, it has raised around $57 Mn till date and counts CDC Group, IFC, Jungle Ventures, and PayU among its backers. 

In 2021, Vayana Network received an in-principle approval to set up ITFS (International Trade Finance Services) platform at GIFT City (Gujarat) under the aegis of the International Financial Services Centres Authority (IFSCA).

Vayana Network competes against the likes of Vivriti Capital, Yubi, KreditBee, and FinAGG.

The post Exclusive: Vayana Network To Raise $20 Mn From SMBC Asia Rising Fund, Others appeared first on Inc42 Media.

Fintech unicorn Navi Finserv has marked close of $38 Mn (around INR 318.2 Cr) personal loans securitisation deal with financial and investment banking firm JP Morgan.

Securitisation is the process of converting an asset – in this case, personal loans – into marketable securities, typically for the purpose of raising capital by selling it to other investors.

The deal will help the Bengaluru-based startup to expand its operations and grow its digital personal loans business.

“This deal serves as a substantial endorsement of the high quality of our loan portfolio and the sustained growth that Navi has been able to achieve in the past few years,” said Sachin Bansal, cofounder, CEO and executive chairman of Navi Finserv.

This comes days after Navi Finserv in May reportedly raised INR 150 Cr via bond issuance from a clutch of investors, including Dadachanji Group chairman Kairus Shavak Dadachanji, Pervin Kairus Dadachanji, and Rishad Kairus Dadachanji. 

Navi Finserv converted into a public entity in March 2022. In the same month, Navi’s parent company, Navi Technologies, filed its DRHP to raise  INR 4,020 Cr through an IPO.

According to the DRHP, Navi Technologies planned to raise INR 3,350 Cr via a fresh issue of equity, and another INR 670 Cr in a pre-IPO round.

However, the company later scrapped its listing plans despite getting SEBI’s nod due to market volatility and the rejection of its banking licence application.

Navi Technologies’ subsidiary Navi Finserv posted a net profit of INR 172 Cr in the financial year 2022-23 (FY23) as against a loss of INR 67 Cr in FY22.

The startup’s operating revenue jumped 2.8X to INR 1,283 Cr in FY23 from INR 457.1 Cr in FY22.

The post Sachin Bansal’s Navi Finserv Closes $38 Mn Securitisation Deal With JP Morgan appeared first on Inc42 Media.

Paytm’s parent company One97 Communications has rolled out an upgraded soundbox device to facilitate payments by tapping a debit or credit card or scanning a QR code.

The NFC (near field communication) card soundbox would accept digital payments through scanning QR codes from a user’s phone as well as tapping the bank cards, the company said.

Founder and CEO Vijay Shekhar Sharma said the Paytm QR card soundbox is an integration of two devices into one, which eases the process of transaction to both the merchant and customers.

This new card box has the feature of sending voice prompts of the transaction progress in 11 local Indian languages and it has been pilot tested with merchants from food business around various cities in the country including Amritsar, Lucknow, Agra, Delhi, Jaipur, Chennai, Bengaluru, Dehradun, Ahmedabad and Hyderabad.

Sharma also said that this upgraded soundbox device is as affordable as its existing soundbox and available on a monthly rental basis, which starts from INR 150 onwards. The device has the battery capacity of lasting 10 days without having to recharge in between.

However, one of the merchants from Hyderabad, who was a part of the pilot test highlighted the limitation of the device which restricts the card style of payments to tap mode alone. Customers that haven’t activated netbanking will not be able to make payments using their card.

Also, the device currently has the bandwidth of accepting payments of up to INR 5000 per transaction.

At 12:19 PM, shares of Paytm were trading at INR 498.45 apiece on the BSE on Tuesday (July 30), up 1.2% from the previous close.

Earlier in April, the fintech juggernaut launched two new soundboxes to receive UPI and credit card on UPI payments, made completely in India, which were equipped with 4G network connectivity and better sound quality.

Additionally, Paytm said in the webinar that it foresees no impact of lower incentives earmarked by the government in the budget for promoting small ticket digital transactions.

Sharma has confirmed that the company will maintain overall guidance and aims to achieve the projected profit margins in the remaining quarters, while also denying any impact of lower allocation of incentives to promote small ticket digital transactions on his forecast.

“We remain committed to doing the same (achieve a profitable quarter in this fiscal) because we already said without UPI incentive,” he said.

It is pertinent to note that the Centre slashed the budget allocation for incentivising digital payments in the fiscal year 2024-25 (FY25) by over 42% to INR 1,441 Cr.

The allocation for fintech startups and banks for promoting RuPay debit cards and low-value BHIM-UPI P2M (person-to-merchant) transactions stood at INR 2,485 Cr in FY24, as per the revised estimates.

The post Paytm Launches NFC Card Soundbox To Integrate QR And Card Payments In One Device appeared first on Inc42 Media.

Raise Financial Services, which operates stock trading and investment platform Dhan, is in early stage of discussions to raise around $100 Mn in a new funding round, which will propel the company’s valuation between $1.2-1.5 Bn, earning it unicorn status.

As per a Moneycontrol report, although the talks are still in the early stages, investment banking firm Avendus has been roped in to handle the transaction mandate.

Founded in 2021 by former Paytm Money CEO Pravin Jadhav and Alok Pandey, Raise offers multiple financial services in the stock broking space, primarily targeting users in Tier I, II Indian cities. Its portfolio of products consists of stock broking app Dhan, Option Trader app to facilitate options trading, Dhan Web platform, TradingView by Dhan and an API platform for traders called DhanHQ API. 

Since its inception, the startup has also acquired brokerage company Moneylicious and edtech platform Upsurge. 

Dhan is a part of Raise, which focuses on trading and investment and competes with larger rivals such as Zerodha, Groww, and Angel One.

For Dhan, the new funding round will be the largest since its inception, boosting its valuation from approximately $150 Mn to between $1.2 and $1.5 Bn. 

Inc42 has reached out to the company. The story will be updated as per the responses.

As per the report, the fresh capital will support business expansion and enhance its competitive edge. While Dhan currently offers investing and wealth services, it plans to expand into financing, payments, and insurance to capture a larger market share. The round is expected to attract both new investors and existing backers, including Beenext, Mirae Asset Venture Investments, 3one4 Capital, and Rocketship.vc, though formal negotiations are still pending.

Raise Financial Services secured seed funding from Mirae Asset Venture Investments, with contributions from prominent angel investors such as CRED CEO Kunal Shah, Flipkart CEO Kalyan Krishnamoorthy, PhonePe founders Sameer Nigam and Rahul Chari, Pine Labs CEO Amrish Rau, and Jupiter Money CEO Jitendra Gupta. 

In January 2022, the company raised $22 Mn in a funding round led by BEENEXT, with participation from Mirae Asset Venture, 3one4 Capital, and rocketship.vc.

In August 2021, Raise Financial Services acquired Mumbai-based stock broker Moneylicious Securities and integrated it with the Dhan platform.

Besides, in June 2022, fintech platform Raise Financial Services announced plans to invest up to $500K in early-stage startups in the investech and wealthtech space, primarily in India.

In FY23, Mumbai-based Raise Financial Services achieved profitability, reporting a net profit of INR 7.16 Cr, compared to a net loss of INR 2.78 Cr the previous year. It’s operating revenue zoomed 25X to INR 20.74 Cr in FY23 from INR 82.14 Lakh in FY22.

The post Trading Platform Dhan’s Parent Eyes Unicorn Tag With $100 Mn Funding appeared first on Inc42 Media.

US intelligence agency Federal Bureau of Investigation (FBI) has reportedly reached out to the homegrown cryptocurrency exchange WazirX to probe the nature of a cyberattack allegedly involving North Korean hackers and to assist with the ongoing investigation.

While the company did not reveal the identity of the attackers, cofounder Nischal Shetty told ET, “We’re convinced it could be North Korea’s Lazarus Group.”

Lazarus, alleged to be backed by the North Korean government, is known for carrying out some of the world’s largest crypto exchange attacks in the past.

Inc42 has reached out to the company for comments on the development. The story will be updated based on the response.

“Global law enforcement agencies, such as the FBI, want to future-proof their own cryptocurrency market from any such shocks, and their expertise will greatly benefit the company’s efforts as well,” a person close to WazirX told ET.

On July 18, WazirX experienced a major security breach, resulting in withdrawals of around $234.9 Mn during the early European hours.

Following this, the company also announced a prize of $23 Mn as a part of its bounty programme to recover the $230 Mn assets stolen during the attack.

Earlier, Inc42 reported that the attack likely originated from Liminal’s infrastructure, bypassing their final verification step, as evidenced by the use of 3 WazirX signatures and 1 Liminal signature.  

WazirX’s security breach affected one of its wallets, Safe Multisig, on the Ethereum network, leading to the loss of user funds.

“The attack of this magnitude and nature was unprecedented. No one has seen such a sophisticated attack ever on a centralised exchange,” Shetty said, adding, “It’s not a fly-by-night operator or hacker, it’s really a state actor who has carried out this attack with extreme sophistication. I am not justifying the situation, but if it could happen to us despite the industry best practices, it could happen to anyone.” 

The report further added that blockchain experts indicated the possible involvement of the cybercriminal group Lazarus in the attack.

Founded in 2017, WazirX is a bitcoin and cryptocurrency exchange where you can buy, sell, and trade digital assets, catering to both first-time investors and professional traders alike.

As per its website, the company claims to specialise in cryptocurrency, cryptocurrency exchange, blockchain technology, digital assets, Tron, Bitcoin wallet, P2P transactions, buying Bitcoin, Ethereum, Ripple, Tron, and Matic in India, crypto trading, investing, NFTs, Dogecoin, and Polygon.

The post Now, FBI Reaches Out To WazirX On Alleged Crypto Heist By North Korean Cyber Criminals appeared first on Inc42 Media.

CarDekho’s insurance arm InsuranceDekho has secured composite insurance broking licence from the Insurance Regulatory and Development Authority of India to offer reinsurance service to its clients beyond insurance broking.

“Our goal is to leverage our technological prowess and deep industry expertise to bring enhanced value to our clients and partners. This approach not only improves the insurance landscape but also strengthens our market position,” InsuranceDekho’s founder and chief executive Ankit Agrawal said.

Reinsurance, in simple terms, suggests the risk transfer of an insurer (customer) to another company in order to shrink the possibility of large payouts for a claim.

InsuranceDekho’s licence upgrade follows PB Fintech’s wholly-owned subsidiary PolicyBazaar Insurance Brokers receiving approval to upgrade its licence, allowing its entry into the reinsurance business, in February.

Also, this comes at a time when InsuranceDekho was in the last leg of discussions to acquire a majority stake through share swap in Bengaluru-based wealthtech startup BankSathi, in June.

Founded in 2016 by Agrawal and Ish Babbar, InsuranceDekho is an omnichannel insurance platform providing services such as investment options and tax schemes apart from insurance options. The company claims to have direct integration with 48 insurance companies in India, offering over 630 insurance products for motor, health, life, fire, marine, and more.

InsuranceDekho said in a statement that owning a composite insurance broker licence will enable the company to leverage its technology and data analytics capabilities and strong relations with Indian insurer partners to place reinsurance business at competitive prices.

This approach not only improves the insurance landscape but also strengthens our market position, Agrawal added.

Agrawal told Inc42, “Our long-term goals revolve around enhancing insurance penetration and accessibility throughout India. Our strategic expansion into reinsurance broking aligns seamlessly with this vision. This strategic move will enable us to utilize advanced data analytics and technology to place reinsurance business at competitive prices, thereby bolstering contribution margins and increasing EBITDA margins for InsuranceDekho.”

The Delhi NCR-based company initially revealed its plans of reinsurance initiative in October 2023, while raising $60 Mn (over INR 502.3 Cr) in its ongoing Series B funding round. 

Meanwhile, Bengaluru-based insurtech company Covrzy received direct broking (general) licence from the Insurance Regulatory and Development Authority of India, to operate as a direct insurance broker to offer business insurance solutions, a week ago.

Earlier this month, Aeries Financial Technologies, which runs AI-led fintech startup CASHe, bought Hyderabad-based Centcart Insurance Broking Services, to enter the insurance broking vertical.

InsuranceDekho reported a 29% decline in its net loss to INR 51.5 Cr in the financial year 2022-23 (FY23) from INR 72.2 Cr in FY22, on the back of a strong growth in its business, while its operating revenue doubled to INR 96.4 Cr during the year under review from INR 47.9 Cr in the previous fiscal year.

The post InsuranceDekho Bags Composite Broking Licence, To Offer Reinsurance Services appeared first on Inc42 Media.

The likes of Groww, Zerodha, Angel One and others have seen unprecedented growth in the past couple of years, adding millions of active investors to their platforms. But this good run has seen two separate setbacks this month.

On July 1, SEBI decided to halt the zero-brokerage facility on discount broking platforms such as Zerodha, Groww, Upstox, among others, a move that was largely seen as tackling the massive surge in futures and options trading.

The second setback came via this week’s Union Budget (see highlights from our coverage below.) A hike has been proposed in capital gains tax and securities transaction tax. We’ll delve into why these taxes were hiked, but common sense dictates that retail investors are more likely to think twice about how much they now want to invest.

Together, these two developments threaten to disrupt the investment tech gravy train, and the risk of Jio Financial Services coming in and grabbing the market cannot be underestimated. So what happens to the top two players — Groww and Zerodha?

Let’s find out, after we go through the top stories from our newsroom this week:

• Josh Fizzles Out: VerSe Innovation’s Josh is faltering after failed monetisation models, 80% YoY dip in monthly downloads and 50% decline in monthly active users. Will it drop off like other short video apps?
• The Soothe Story: What’s surprising about women’s hygiene startup Soothe Healthcare entry into the INR 100 Cr revenue club is how it got there despite not playing by the rules of the D2C game. Here’s why

Budget Blues For Groww, Zerodha

Before we get to the impact from SEBI’s changes, let’s see what changes for Groww, Zerodha and others after the Union Budget.

The finance minister proposed increasing the rates of STT from 0.0625% to 0.1% on options and from 0.0125% to 0.02% for futures. Short term gains on certain financial assets will attract a tax of 20%, whereas the long term capital gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5%.

Many have called the budget a deathblow to the rapidly growing investment tech space as retail investors reassess their exposure to taxes.

Industry experts believe that this will largely impact F&O trading, which has seen exponential growth in the past year. As per the latest SEBI’s monthly bulletin, the equity derivatives volumes of the two bourses saw a whopping 71% YoY growth to INR 9,504 Lakh Cr in May 2024.

This growth has coincided with investors flocking to discount broking platforms. Groww now boasts over 10 Mn active investors as of May 2024, with Zerodha trailing at 7.5 Mn and Angel One not far behind at 6.5 Mn.

F&O and intra-day traders contributed to the revenue and user growth (more than 80%) for discount broking platforms such as Zerodha, Groww and Angel One, as per industry sources.

• Zerodha’s operating revenue grew 37% to INR 6,832 Cr in FY23 — fees and commission charges accounted for 84% of this total.
• Groww’s operating revenue more than tripled to INR 1,277.8 Cr in FY23, with the company breaking into profits. A whopping 95.9% of its revenue came from subscriptions and commissions fees in FY23.
• For publicly-listed Angel One, broking fees constituted 65% of the overall revenue in Q1 FY25.

The tax shock is likely to pull back the growth in FY25 to some extent, when combined with the hike in STT.

Zerodha cofounder and CEO Nikhil Kamath tweeted on budget day that the STT increase could increase tax collections by up to 66%, if trading volumes don’t drop. Kamath expects this to go up to INR 2,500 Cr annually from October, based on 2023 volumes.

Though he did not elaborate on how or whether this will affect trading activity, others say the budget has all but ended the frenzy around F&O, intra-day trading.

“Zerodha contributes 20% to the retail trading volumes of stock exchanges in India. Groww’s active user base was more than 11 Mn in June. Broking companies which have the highest market shares will get hit the hardest by these changes,” a Bengaluru-based wealth management app’s founder told Inc42 this week.

SEBI’s Slap

Now let’s step back to early July when SEBI asked MIIs such as broking platforms to levy a uniform exchange fee, irrespective of volume or turnover. They can no longer offer any rebate to traders for bringing in more volume through their platforms.

The regulator pressed ahead with the change as many platforms were nudging retail traders towards F&O trading. This is expected to push up the brokerage costs especially for investors who have become habituated to zero or near-zero fee structures.

Here’s how it used to work: Stock exchanges impose a transaction fee on trades executed on their platform, which they charge to brokers on a monthly basis. This fee constitutes the main revenue stream for any stock exchange such as NSE or BSE. In Q4 FY24, for instance, 74% of NSE’s revenue came from income from transaction fees.

While the exchange applies these transaction fees on a monthly basis, broking platforms charge their clients fees on a daily basis. The difference between the collected fees and the actual fees paid to the exchange is the net margin for the broking platform. Suffice to say, driving traffic on a daily basis is important for these platforms from the point of view of overall profitability.

“A majority of new investors in India prefer discount broking platforms such as Zerodha or Groww or Upstox or Paytm Money because of the zero-brokerage model. But now we have to let go of the zero-brokerage structure and increase brokerage for F&O trades from October 1,” said the cofounder of a Bengaluru-based discount broking platform.

In fact, zero brokerage was a USP, but now it’s gone. In the case of Zerodha, the change is expected to have a 10% impact on revenue, according to CEO Kamath.

The founder quoted above said platforms have lost the incentive to generate huge turnovers as this directly impacts margins at scale. The market making activity will be adversely impacted in the long term. Brokerage fees will also rise in the long run because intermediaries such as depositories and advisories will attempt to recover revenue losses.

Jio Waiting To Pounce

What will be really interesting to see is where the three largest platforms ended up in FY24 after flying high in FY23. If anything, we expect revenue to be at record levels for all the players due to the boom in F&O trading.

The financial performance is going to be even more under the spotlight when Jio Financial Services enters the market. Competition in this space is only growing, and existing players were all extremely bullish about growth — at least before July 2024.

Paytm is redoubling its efforts on this front as it looks to diversify revenue reliance on payments.

Walmart-owned PhonePe continues to press the accelerator on its investment platform Share.Market, which is a key part of its super app plan. CRED acquired investment tech startup Kuvera in January to enter the fast-growing wealth management space and expand its platform play.

As we wrote a few weeks ago, Zerodha, in particular, has lost pace to rivals such as Groww and Angel One. With IPO season in full swing (at least for the new-age tech companies) and likely to continue well into 2025, investor activity was expected to surge as these platforms competed for every trade.

What happens now after the double blow of SEBI changes and the changes from the budget? A stormy July has left Zerodha, Groww and every other player at a disadvantage after the boom of the past two years.

Best Of The Union Budget 2024-25

• Nirmala Sitharaman’s budget signalled that the government is looking at startups not as a separate class of businesses but as a key component of the business landscape at large. Here are the key takeaways
• Angel tax was an albatross across the neck of all Indian entrepreneurs for 12 years, and now the battle has been won, writes 3one4 Capital founding partner Siddarth Pai
• The INR 1,000 Cr VC fund for space tech shows the government’s faith in the space economy, and is a strong validation for the innovation in the sector, according to Vishesh Rajaram, managing partner at Speciale Invest
• While the abolition of angel tax has come as a big relief, now the government needs to dismiss pending cases, urges Mohandas Pai, the former CFO of Infosys and partner at Aarin Capital

Sunday Roundup: Tech Stocks, Startup Funding & More 

• Weekly investment activity fell to a new low for 2024, as just $43 Mn was invested into Indian startups this week. Effect of the Union Budget?
• The blame game continues in the WazirX crypto heist as the company pointed at digital asset management platform Liminal as being the weak link, which in turn laid the fault at WazirX’s doors

• Electric vehicle maker Ola Electricis is set to open its IPO on August 2 and has filed its red herring prospectus in preparation for the public listing
• Apple is set to begin manufacturing high-end iPhone Pro and Pro Max models in India, starting with iPhone 16 series, as it looks to further move production away from China

The post Zerodha, Groww In Revenue Storm  appeared first on Inc42 Media.

Update | July 27, 1:02 PM

A day after Inc42 reported that WazirX’s preliminary investigation found that the cyber attack on the cryptocurrency exchange likely originated from Liminal’s infrastructure, the latter dismissed the findings saying that the “incident originated from an external source”.

“On July 19, 2024, we were notified of a security incident affecting a self-custody multi-signature smart contract wallet used by one of our customers, WazirX. This wallet was reported to be compromised on July 18. Our initial assessment indicates that Liminal’s platform, infrastructure, wallets, and assets remain secure. We reiterate that our platform continues to operate seamlessly, processing transfers and withdrawals for all our customers,” a Liminal spokesperson said in a statement.

“To uphold highest standards of transparency, Liminal has proactively engaged independent CERT certified, third-party experts to conduct thorough forensic audits backed by published reports. As a wallet infrastructure support platform, we emphasise that this incident originated from an external source, underscoring the crucial need for comprehensive security measures across platforms,” the spokesperson added.

Original Story| July 26, 11:48 AM

Days after WazirX experienced a major security breach, resulting in withdrawals of around $234.9 Mn during the early European hours, the cryptocurrency exchange has launched a preliminary investigation in connection with the cyber attack.

Following this, the company also announced a prize of $23 Mn as a part of its bounty programme to recover the $230 Mn assets stolen during the attack.

According to its preliminary findings, the attack likely originated from Liminal’s infrastructure, bypassing their final verification step, as evidenced by the use of 3 WazirX signatures and 1 Liminal signature. 

Liminal is a digital asset management platform that helps secure and manage cryptocurrency transactions through a structured and secure process. It is specifically designed to handle high-value transactions and prevent unauthorised or malicious transfers. 

As per the company, the attack involved a contract upgrade that Liminal’s interface reportedly does not permit. 

“We have representations from Liminal that their interface does not allow initiating contract upgrade from its interface,” the company said in a statement.

However, it shared that none of its signers’ machines were compromised.

The findings further revealed that the malicious transaction was not sent to any of the whitelisted destination addresses, which should have been blocked by Liminal’s firewall and whitelist policy.

“Contrary to some reports by self-proclaimed crypto experts on social media, WazirX did not sign any malicious transactions 8 days before the attack. The attacker had created smart contracts on July 10, 2024, but these had no interaction with the WazirX wallet until July 18, 2024,” the company said in a blog post.

WazirX’s security breach impacted one of its wallets Safe Multisig on the Ethereum network, resulting in the loss of user funds.

Founded in 2017, WazirX is a bitcoin and cryptocurrency exchange where you can buy, sell, and trade digital assets, catering to both first-time investors and professional traders alike.

Based on its preliminary analysis, the company has outlined two potential scenarios that may have occurred. Scenario 1 suggests that the malicious transactions were directly received by the WazirX signers from Liminal due to a possible breach of Liminal’s infrastructure. 

Scenario 2 proposes that malware compromised all three WazirX signers’ devices. Although there is no preliminary evidence of malware, WazirX has initiated a forensic investigation. 

Given the current findings, WazirX believes Scenario 1 is more likely but awaits further forensic results before confirming. 

The post [Update] WazirX’s Crypto Heist: Probe Finds Attack Originated From Liminal’s Infrastructure appeared first on Inc42 Media.

In a major cyber heist at IndusInd Bank, fraudsters managed to transfer INR 40 Cr from the bank’s customers into various mule accounts of which INR 33 Cr were retrieved by the Maharashtra cyber cell.

As per PTI, the incident was reported by a vigilant bank official on July 19. Following this, Maharashtra Cyber coordinated with relevant financial intermediaries and managed to recover INR 31 Cr that same evening.

Follow-up procedures that have been continuing intensively has taken the amount saved to Rs 32.89 crore, an official was quoted as saying by the report.

This comes at a time when the Reserve Bank of India has issued heightened warnings about mule accounts, and policymakers are intensifying efforts to prevent such accounts from being used in online scams.

This also comes at a time when cyberattacks on Indian websites surged by 261% year-on-year (YoY) in the first quarter (Q1) of 2024, according to a report by security SaaS firm Indusface. 

India topped the list of 95 countries experiencing the highest number of DDoS (distributed denial of service) and bot attacks. In comparison, global cyberattacks increased by 76% YoY during the same period.

This comes at a time when India is witnessing a big spurt in cybercrimes. Multiple Indian startups and companies have fallen prey to cyberattacks. 

On July 18, cryptocurrency exchange WazirX experienced a major security resulting in withdrawals of approximately $234.9 Mn.

In May there was a “possible intrusion and data breach” at the state-owned telecom company Bharat Sanchar Nigam Ltd (BSNL).

The post IndusInd Bank’s Cyber Heist: INR 40 Cr Sent To Multiple Mule Accounts appeared first on Inc42 Media.

The Reserve Bank of India (RBI) has selected five entities, including three startups, for its fifth cohort of the regulatory sandbox initiative.

The selected startups include Epifi Technologies (Fi.Money), Finagg Technologies (FinAGG) and Signzy Technologies. Besides, Connectingdot Consultancy and Indian Banks’ Digital Infrastructure Company (IBDIC) have also been selected for the project.

For the uninitiated, regulatory sandboxes enable companies to test new products or services in a controlled regulatory environment. This, in turn, allows these entities to scale up their offerings, bring efficiency and devise solutions for new-age problems. 

The theme-neutral cohort will look to incubate “innovative” products or services across various functions under RBI’s regulatory domain. In a statement, the central bank said that the five entities were shortlisted for the “test phase” from the 22 applications received by it. 

It also said that the selected entities will commence testing of their solutions from next month.

Under the sandbox initiative, Epifi Technologies will develop a solution for digital opening of  non-resident (external) and non-resident (ordinary) accounts through video KYC and “identity validations”.

The central bank said that Epifi’s proposed tool will enable a seamless account opening experience for NRIs by obviating the need for physical documentation and verification. It also said that the offering will bring efficiency as well as reduce cost and turnaround time.

Meanwhile, FinAGG will build a blockchain-based “deep tier vendor financing” solution that will enable financing for MSMEs in the procurement supply chain of large enterprises. The offering will allow conversion of receivables from these enterprises into blockchain-based tokens that can be redeemed by MSMEs for availing credit from banks and NBFCs. 

Additionally, Signzy will look to develop an unassisted video-KYC solution that will allow users to complete video KYC steps independently without human intervention. 

“The solution (of Signzy) envisages to reduce time, increase success rates, significantly lower customer drop-offs and ensure a seamless and efficient KYC experience for both customers and regulated entities,” added the statement. 

The RBI invited applications from eligible entities to participate in the fifth cohort of the sandbox initiative in September 2023. 

The central bank invited applications for the first cohort on the ‘retail payments’ theme in late-2019. It was followed by the selection of a cross-border payments-centred second cohort in December 2020. 

Afterwards, the third cohort was announced in September 2021 on the theme ‘MSME lending’.  Subsequently, the central bank also selected six fintech startups, including Bahwan Cybertek, Crediwatch Information Analytics, and Wibmo, as part of its fourth cohort of the regulatory sandbox initiative last year. 

The sandbox project has paved the way for the emergence of startups like ToneTag, Citycash, and IND-e-Cash for use cases such as sound-based UPI payments and digital payments for feature phones. 

The post RBI’s Regulatory Sandbox: Fi.Money, FinAGG & Signzy Selected For 5th Cohort appeared first on Inc42 Media.

The Reserve Bank of India has imposed a penalty of INR 87.55 Lakh on Ola Financial Services for flouting various regulatory norms.

While a fine of INR 33.40 Lakh has been imposed on the fintech arm of ride-hailing giant Ola for  non-compliance with know your customer (KYC) norms, another penalty of INR 54.15 Lakh has been imposed for contravening master directions on prepaid payment instrument (PPI).

For the uninitiated, Ola Financial Services is the fintech arm of the ride-hailing major and runs OlaMoney.

In a statement, the RBI said Ola Financial Services was issued a show cause notice to explain why the penalty should not be imposed on the company.

 “… After considering their written responses and the oral submissions made during the personal hearing, RBI concluded that the aforesaid charges of noncompliance with RBI directions were substantiated and warranted imposition of monetary penalty,” said the central bank. 

It also said that Ola Financial Services had reported instances of shortfall in balance in its escrow account and filed an application for compounding of the violation. After hearing the company’s plea and oral submissions, the RBI “determined” that the contraventions could be compounded, and imposed the fine. 

Simply put, compounding refers to an entity voluntarily pleading guilty for a violation and seeking redressal.

The fines have been imposed by the RBI in exercise of powers under Section 30 and Section 31 of the Payment and Settlement Systems Act, 2007. 

This is not the first time that Ola Financial Services has landed in a soup. In 2022, the central bank slapped a penalty of INR 1.67 Cr on the company for similar non-compliances with PPI and KYC norms. 

Earlier this year, Ola founder and CEO Bhavish Aggarwal’s brother Ankush Aggarwal returned to Ola Financial Services as its new chief executive. 

Meanwhile, Ola Financial Services slipped into the red in the fiscal year 2022-23 (FY23) with a net loss of INR 54.6 Cr. The company had reported a profit of INR 8.6 Cr in the previous fiscal year. 

Its operating revenue declined 22% to INR 85.5 Cr in FY23 from INR 110 Cr in FY22. 

The post RBI Slaps INR 87.5 Lakh Fine On Ola Financial Services For Flouting KYC & PPI Norms appeared first on Inc42 Media.

Mumbai-based Raise Financial Services turned profitable in the financial year ended March 31, 2023. The fintech startup reported a net profit of INR 7.16 Cr in the financial year 2022-23 (FY23) as against a net loss of INR 2.78 Cr in the previous fiscal year. 

The startup’s profitability can be attributed to strong business growth. Operating revenue zoomed 25X to INR 20.74 Cr in FY23 from INR 82.14 Lakh in FY22.

Including other income, the fintech startup’s total revenue stood at INR 26.53 Cr, a 10X jump from INR 2.5 Cr in FY22. 

Founded by ex-Paytm Money CEO Pravin Jadhav and Alok Pandey in 2021, Raise offers multiple financial services in the stock broking space, primarily targeting users in Tier I, II Indian cities. Its portfolio of products consists of stock broking app Dhan, Option Trader app to facilitate options trading, Dhan Web platform, TradingView by Dhan and an API platform for traders called DhanHQ API.

Since its inception, the startup has also acquired brokerage company Moneylicious and edtech platform Upsurge. In 2022, the startup shared plans to invest up to $500K in early-stage startups in the investment tech and wealthtech space, mainly in India.

The startup raised an undisclosed amount of seed funding round in 2021 from Mirae Asset Venture Investment and a clutch of undisclosed investors. 

Where Did Raise Spend?

In tandem with the rise in revenue, the startup’s total expenses also jumped over 3X to INR 17.80 Cr in FY23 from INR 5.28 Cr in the previous fiscal year.

Advertising Expenses: Marketing expenses accounted for the largest share of the startup’s expenses. It spent INR 13.64 Cr on marketing during the year under review as against INR 2.83 Cr in the fiscal prior. 

Employee Expenses: Employee benefits surged 240% to INR 3.65 Cr in FY23 from INR 1.08 Cr in the previous fiscal year.

Raise competes with the likes of Zerodha, Groww, and Angel One in the country’s burgeoning investment tech market. As per an Inv42 report, the country’s investment tech industry will become a $74 Bn market opportunity by 2030 from $9.2 Bn in 2022.

The post Ex-Paytm Money CEO’s Raise Fintech Turns Profitable In FY23, Posts PAT Of INR 7.16 Cr appeared first on Inc42 Media.

Shares of Go Digit General Insurance rallied over 8% to touch INR 362.25 apiece during the intraday trading session on the BSE on Friday (June 26) after the unicorn reported robust financial performance for the first quarter of the financial year 2024-25 (Q1 FY25).

However, the shares shed some of the gains to end today’s session 3% higher at INR 345.25 on the BSE.

On Thursday, Go Digit reported a 74% surge in its net profit to INR 101 Cr in Q1 FY25 from INR 58 Cr in the year-ago quarter. 

The startup clocked a total gross written premium (GWP) of INR 2,660 Cr in Q1 FY25, up 22.2% from INR 2,178 Cr in the corresponding quarter of the previous fiscal year.

The company attributed the rise to the growth in third-party motor, health, travel, and personal accident premiums.

The insurtech startup’s total income, including net earned premium, income from investments, and other income, rose more than 24% YoY to INR 2,076 Cr in Q1 FY25.

Go Digit’s net earned premium grew to INR 1,824 Cr during the period under review from INR 1,475 Cr in the year-ago quarter.

Founded in 2017 by Kamesh Goyal, Go Digit leverages technology to offer insurance policies across verticals such as health, motor vehicle, travel, and property. The startup counts Fairfax, Peak XV Partners and A91 Partners among its backers.

The insurtech startup made a lukewarm stock market debut earlier this year, with its shares listing at a premium of 5% to the issue price on the NSE. 

Following its listing, on June 11, Go Digit posted over a 400% jump PAT to INR 182 Cr in FY24 from INR 36 Cr in FY23.

At INR 345.25, the stock’s last closing price was 18.6% above the listing price of INR 281 on the BSE and 21.2% higher than the issue price of INR 272.

The post Go Digit Shares Jump 8% Intraday On Robust Q1 Results appeared first on Inc42 Media.

Shares of Paytm jumped 10% to INR 508.85 apiece during today’s intraday trade on the BSE after the fintech major reportedly secured approval from the government to invest INR 50 Cr in its payments arm, Paytm Payment Services.

Reuters reported on the development first, citing a top finance ministry official.

The approval will enable Paytm to apply for an online payment aggregator (PA) licence from the Reserve Bank of India.

The approval was reportedly stuck for months partly due to concerns about China-based Antfin (Netherlands) Holdings’ shareholding in its parent entity.

As of the fiscal year ended March 2024, Antfin (Netherlands) Holdings held a 9.88% stake in Paytm’s parent One 97 Communications. 

Earlier this month, the government panel overseeing investments linked to China, greenlit the INR 50 Cr investment by Paytm in its subsidiary.

Paytm incorporated Paytm Payment Services to secure a PA licence. While the company initially tried to get the PA licence in 2020, the RBI directed it to resubmit the application to ensure compliance with the FDI rules.

The PA framework was introduced by the RBI in March 2020. It mandates that payment gateways secure an aggregator licence for acquiring merchants and delivering digital payment acceptance solutions.

The approval of Paytm’s investment in its payments arm comes as a major relief for the company after the RBI’s crackdown on Paytm Payments Bank affected its business.

Paytm saw its consolidated net loss widen to INR 840.1 Cr in the June quarter (Q1) of the financial year 2024-25 (FY25), up 134% year-on-year from INR 358.4 Cr in the year ago-period.

Revenue from operations dropped 36% in Q1 FY25 to INR 1,502 Cr from INR 2,342 Cr in the corresponding quarter last year.

Sequentially, Paytm’s consolidated net loss surged 52.6% while revenue from operations plummeted 33.7%.

The post Paytm Gets Govt Nod For INR 50 Cr Investment In Its Payments Arm, Stock Rallies 10% appeared first on Inc42 Media.

Fintech unicorn Yubi Group, formerly known as CredAvenue, has rolled out additional stock options for its eligible employees worth INR 245 Cr (nearly $29 Mn).

As per Registrar of Companies (RoC) filings accessed by Inc42, the company’s board approved the allocation of 11 Lakh stock options under its existing 2022 Employee Stock Option Plan (ESOP) and an additional 11 Lakh options under its new 2024 ESOP scheme.

The development was first reported by Entrackr.

With this, Yubi’s 2022 ESOP pool will now increase to 49.08 Lakh options. Overall, the total size of  the fintech unicorn’s ESOP pool will now increase to over INR 1,000 Cr. 

Confirming the development to Inc42, a company spokesperson said that the ESOP scheme will be available for both existing and new employees. In a statement, Yubi said “it is investing in its team members through an expanded stock option plan, recognising the significant wealth creation potential it offers”.

“With over 86% of the workforce now shareholders, this initiative aligns the interests of the team with the long-term success of the company, rewarding their contributions and fostering a deep sense of ownership and commitment,” the company added.

Yubi also said that it has onboarded over 90 new campus hires since April 2024 to support its “ambitious growth and innovation goals”.

Founded in 2020 by Gaurav Kumar, Yubi Group is a full-stack digital platform designed to facilitate the discovery, trading, execution, and fulfillment of debt solutions for investors. The company is backed by Peak XV Partners, Lightspeed, Lightrock, TVS Capital, among others.

This expansion of the ESOP pools comes at a time when the company has made major leadership appointments across its group companies – Yubi, Corpository, and Aspero.

Meanwhile, Yubi Group reported a revenue of INR 327.6 Cr in the financial year 2022-23 (FY23), up 2X from FY22’s INR 165.6 Cr. On the other hand, loss soared 745% year-on-year (YoY) to INR 482 Cr during the year. 

The post Yubi Expands ESOP Pool, Adds Stock Options Worth $29 Mn appeared first on Inc42 Media.

Insurtech startup Go Digit General Insurance saw its profit after tax (PAT) soar 74% to INR 101 Cr in the June quarter (Q1) of the fiscal year 2024-25 (FY25) from INR 58 Cr in the year-ago quarter. 

On similar lines, Go Digit’s total gross written premium (GWP) jumped 22.2% year-on-year to INR 2,660 Cr in the quarter ended June 2024. The insurtech startup clocked a GWP of INR 2,178 Cr in Q1 FY24. 

The surge came largely on the back of growth in third-party motor, health, travel, and personal accident premiums.

Go Digit’s net earned premium rose to INR 1,824 Cr during the period under review from INR 1,475 Cr in the year-ago quarter. 

Third-party motor premiums were the biggest contributor to Go Digit’s GWP during the period at 36%, followed by health, travel and personal accident premiums at 22%. While own-damage insurance premiums accounted for 19% of the total GWP, fire-related premiums contributed 17%. 

The insurtech startup’s total income, including net earned premium, income from investments, and other income, jumped more than 24% YoY to INR 2,076 Cr during the period under review. 

The company said that its premium retention ratio declined marginally to 76.2% in Q1 FY25 from 76.9% in the year-ago period. At the end of June 2024, Go Digit had INR 17,773 Cr in assets under management (AUM) as against INR 15,764 Cr at the end of June 2023.

Founded in 2017 by Kamesh Goyal, Go Digit leverages technology to offer insurance policies across verticals such as health, motor vehicle, travel, and property. The startup is backed by the likes of Fairfax, Peak XV Partners, A91 Partners, among others. 

The insurtech startup made a muted debut on the bourses earlier this year, with its shares listing at a premium of 5% to the issue price on the NSE. 

Zooming Into Expenses 

Go Digit’s total operating expenses zoomed 21% to INR 1,993 Cr in Q1 FY25 from INR 1,642 Cr the year before.

Claims Paid: The company spent INR 118.1 Cr towards insurance claims during the quarter under the review as against INR 544.8 Cr a year ago.

Employee Cost: Go Digit spent INR 88.37 Cr on employee remuneration and welfare in Q1 FY25, up from INR 68.28 Cr in the year-ago period. 

Ad Expenses: Spending towards branding, advertisement, and publicity declined more than 66% YoY to INR 50.75 Cr in Q1 FY25. 

As of June 2024, Go Digit’s total customer base stood at 5.3 Cr. 

Shares of Go Digit ended today’s trading 3.11% lower at INR 335.20 on the BSE. 

The post Go Digit Q1: Profit Surges 74% YoY To INR 101 Cr, GWP Jumps To INR 2,660 Cr appeared first on Inc42 Media.