Minister of State (MoS) for Electronics and Information Technology Jitin Prasada has informed the Parliament that the Centre has constituted an advisory group to formulate a framework to regulate artificial intelligence (AI) in the country.

Responding to a question from Telugu Desam Party members of Parliament (MPs) Lavu Sri Krishna Devarayulu and GM Harish Balayogi, the MoS said that the panel has been tasked with building a framework to promote innovation while curbing the misuse of AI technologies. 

He further added that the group comprises government officials, industry leaders, academicians and other stakeholders. 

“The government has constituted an advisory group for India-specific regulatory AI framework… Its  mandate  is  to  promote  innovation  and  ensure  adequate  guardrails  to  protect  common  citizens against the possible misuse and user harms. Specifically, the terms of reference of the advisory group includes creating contextualised ethical guidelines which are adaptable in India and promote development of trustworthy, fair, and inclusive AI,” added Prasada.

In response to a separate question, MoS (independent charge) in the Ministry of Skill Development and Entrepreneurship Jayant Chaudhary said that 2,914 individuals have so far been trained in AI-related courses under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 till June 30.

MoS Chaudhary also said that an additional 8,909 applicants are undergoing training in various AI courses under the scheme as of June 30. He added that over 1.27 Lakh individuals have been trained in various AI-related courses on the FutureSkills Prime platform, which aims to reskill and upskill IT professionals in 10 emerging areas of technologies.

The comments come at a time when AI mania has gripped the world, which has spawned the rise of multiple startups in the space. This has led to a sharp rise in demand for talent pool catering to the domain and the upskilling programme aims to address that. 

Cognisant of this, tech giant Google announced a partnership with MeitY Startup Hub last month to upskill 10,000 homegrown startups in artificial intelligence. Infosys cofounder and chairman Nandan Nilekani last month also said that the IT major has trained more than 2.5 Lakh employees in GenAI technologies. 

Meanwhile, the growing penetration of generative AI (GenAI) has raised questions about issues related with the technology such as misuse, deepfakes and misinformation. In a bid to crack the whip on this, the Centre, earlier this year, issued an advisory that directed platforms to label undertrial AI models and ensure that no unlawful content is hosted on their sites. 

Notably, industry veterans including SaaS unicorn Zoho’s cofounder Sridhar Vembu have in the past also called for building appropriate safeguards before adopting new technologies.

The post Advisory Group Constituted To Build AI Regulatory Framework: Govt appeared first on Inc42 Media.

As entrepreneurs in India continue to make their mark in the startup ecosystem, finance minister Nirmala Sitharaman has cautioned against a conspiracy to end the country’s entrepreneurship culture even before it fully blooms.

“Hardworking entrepreneurs are building this country. The conspiracy is to end India’s entrepreneurship culture even before it fully blooms, thereby hitting at India’s core backbone, which is India’s entrepreneurship of small and medium units and enterprises that are building India,” the minister said.

While addressing to the general discussion on the FY25 Budget in the Lok Sabha, Sitharaman said that entrepreneurship itself was being made a villain as a part of this conspiracy. 

Without disclosing any name, the finance minister said that some forces are working behind to show India’s instability on the strategic, political and economic fronts. 

On the investment front, Sitharaman said that there is a conspiracy to send a message that India is not safe for foreign investors and that Indian institutions cannot guarantee security to foreign investments.

“There is a conspiracy to send a message to the entire world that India is not safe for investors. This is not good. Rumours are being spread that Indian institutions cannot guarantee security to foreign investments, which is really a sad situation,” she said. 

This development comes against the backdrop of the finance minister making a flurry of announcements during her Union Budget 2024-25 speech for the startup ecosystem. 

These announcements include the abolition of angel tax, reduction of the tax deducted at source (TDS) for ecommerce platforms to 0.1% from 1% earlier, and an additional cut in basic customs duty (BCD) rates on several mobile phone parts, among others. 

Additionally, Sitharaman also announced a 1000 Cr VC fund for the spacetech sector and a credit guarantee scheme for the micro, small and medium enterprises (MSMEs) in the manufacturing sector. 

Contrary to these supportive announcements, 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.

It is pertinent to note that the government on July 29 informed the Parliament that the over 1.4 Lakh startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) have created over 15.5 Lakh direct jobs in the country. 

The post FM Nirmala Sitharaman Cautions Against Conspiracy To End India’s Entrepreneurship Culture appeared first on Inc42 Media.

Open Network for Digital Commerce (ONDC) has launched interoperable QR code to empower every seller, from local artisans to neighborhood shopkeepers.

ONDC’s interoperable QR code, which is currently in its alpha phase, allows sellers to generate a unique QR code that customers can scan using an ONDC-registered buyer app, starting with magicpin and Paytm, and soon expanding across the entire network after initial testing.

“ONDC’s interoperable QR code breaks down the barriers that have held small businesses back. Now, every seller has the power to reach customers digitally, just like the ecommerce giants. It’s a massive leap towards an open, inclusive, and democratised digital marketplace,” said T Koshy, MD and CEO of ONDC.

Sellers can display their QR codes anywhere—on storefronts, products, marketing materials, or social media—allowing them to connect with customers both offline and online. Consumers can simply scan the code with any QR scanner app or ONDC Buyer Apps, such as Paytm and magicpin, to be linked directly to the seller’s online store through their preferred buyer app.

“This isn’t just a new feature; it’s a catalyst for economic growth and digital inclusion. Millions of businesses will come online, creating new opportunities and driving India’s digital economy forward,” Koshy added.

Launched in 2021, ONDC is an initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce & Industry. It aims to promote open networks for the exchange of goods and services over digital or electronic networks. ONDC is a Digital Public Infrastructure based on a network model, rather than an app or platform.

ONDC is an open-source platform designed to democratise ecommerce in India and bring small businesses online. As a private non-profit initiative supported by DPIIT, ONDC strives to make ecommerce more accessible across the country. Companies such as Delhivery, Paytm, PhonePe, Uber, IDFC Bank, Kotak, Shiprocket, Dunzo, and Tata Neu have integrated their services with ONDC.

Recently, the government informed the Parliament that the ONDC now has more than 5.7 Lakh sellers and service providers on the platform.

In a written reply to the Rajya Sabha, Minister of State (MoS) for Electronics and Information Technology Jitin Prasada said that ONDC has 71 seller applications, 22 buyer applications, and 16 logistics service providers and there are a total of over 5.7 Lakh sellers and service providers on the network.

The post ONDC Launches Interoperable QR Code appeared first on Inc42 Media.

Micro venture capital firm Gemba Capital, which counts Plum, Grip Invest, Wint Wealth, Strata, Navadhan and LightFury among its portfolio companies, has floated its second fund with a target corpus of INR 250 Cr, including a green shoe option of INR 50 Cr.

From the second fund, the SEBI-registered AIF manager is looking to back 30 early stage ‘platform-first’ businesses across three focus sectors – fintech, consumer tech and B2B platforms.

Digital ‘platform-first’ businesses are those which can create compounding moats through ecosystem creation, network effects or the ability to stack value-add layers.

The fund will invest in companies with an average ticket size of INR 5 Cr and will reserve 30% of the corpus for making follow-on investments, the VC firm said in a statement.

It is targeting to make the final close of the fund by the end of the year.

“Our journey has evolved from investing proprietary capital to running an angel syndicate and then raising and investing from our INR 70 Cr Fund-I. We are now looking to partner with institutional LPs for our INR 250 Cr Fund-II,” said Gemba Capital’s general partner Adith Podhar. 

Founded in 2018 by Podhar, Gemba Capital is a micro VC firm based out of Bengaluru which claims to have backed over 120 founders across over 50 startups to date. 

It is pertinent to note that Gemba Capital’s first fund was introduced in 2022 and it had a corpus of INR 70 Cr raised via investments from family offices, founders, and CXOs. With its first fund, it offered an average cheque size of INR 2 Cr to the startups. 

The development comes at the heart of homegrown VC and PE firms accumulating notable dry powders to drive the Indian startup ecosystem. 

Earlier this month, Next Bharat Ventures launched an INR 340 Cr fund and a residency programme to catalyse the growth of the social impact startup ecosystem in India.

Last month, VentureSoul Partners rolled out its maiden debt fund, VentureSoul Capital Fund I, with a target corpus of INR 600 Cr.

The development comes around the backdrop of Indian startups encountering the brunt of the ongoing funding winter. 

Not to mention, Indian startups cumulatively raised investments worth $5.3 Bn in the first six months of 2024, which was a 1.8% decline year-on-year. However, the fintech and enterprise tech sectors bagged the most funds during this period. 

The post Gemba Capital Floats INR 250 Cr Second Fund To Back Fintech, Consumer Tech And B2B Businesses appeared first on Inc42 Media.

It’s the season of spring for startup IPOs. After a lull in IPOs in 2022 and 2023 due to geopolitical tensions, a raging funding winter, and macroeconomic pressures, startups are lining up in droves to list on the bourses in 2024. 

Just six months into the year, five new-age tech companies have already listed on the exchanges – Go Digit General Insurance, TBO Tek, Awfis, ixigo and TAC Security. In contrast, five startups had listed in the entirety of 2023 and just three new-age tech companies made their way to the bourses in 2022. 

The first half of 2024 was just the precursor for the things to come. In the second half, segment giants such as foodtech major Swiggy, EV juggernaut Ola Electric, and omnichannel marketplace FirstCry are also eyeing a market debut. 

But, what is emboldening the startups to revisit their IPO plans, a year after many of them shelved or postponed their plans? The answer is the thawing funding winter, a renewed push for profitability and a growing investor appetite for startup IPOs. 

Speaking with Inc42, angel investor Nikhil Parmar said, “Firstly, many startups have matured to a point where they are ready for public markets, driven by strong growth, robust business models, and proven revenue streams. Additionally, favourable market sentiment and ample liquidity have made the stock market an attractive option for raising capital. Investor confidence is also a significant driver”.

Concurring with this, angel investing platform BizDateUp Technologies cofounder Meet Chandan said that the IPO spring has also been fuelled by investors looking to diversify their portfolio and the promise of substantial returns from tech-driven companies.

What has also helped the ecosystem is the bumper listing of all the new-age companies in 2024 so far. From TBO Tek and Awfis to GoDigit Insurance and ixigo, all have listed at a premium and many have even seen healthy rallies post their listing. 

Non-institutional investors (NIIs) and qualified institutional buyers (QIBs) are seeing merit in backing the growing number of Indian startups making a beeline for the bourses. However, challenges remain. 

Investors are primarily focussed on profitable and sustainable ventures and are steering clear of loss-making entities. Awfis, which reported a profitable quarter after its listing, was an outlier in this regard. Additionally, strong corporate governance guardrails and compliance with existing regulations also seem to be on the top of investors’ agenda. 

“Markets currently are receptive to IPO-bound companies with a good brand, decent unit economics and a clear path to profitability. Public markets are hungry for tech stocks and are welcoming good companies with open arms. So, it’s only natural that more founders would want to take their companies public. This is a great sign for the ecosystem,” said VC firm All In Capital’s cofounder Kushal Bhagia.

Parmar believes that the surge in IPOs amid the funding winter showcases the startup ecosystem’s resilience and adaptability. It also reflects the growing maturity of the ecosystem. 

With this in mind, Inc42 has collated a list of all top Indian startups that have listed on the bourses in 2024 so far as well as those who plan to go for IPO in the near term. Before we dive into the list, here are the latest developments from the Indian IPO landscape: 

Latest Updates:

• EV major Ola Electric’s IPO will open for retail subscription on August 2 and has set a price band in the range of INR 72-76 per equity share for its upcoming public issue
• SEBI has reportedly returned the IPO papers of NBFC Avanse Financial Services on “technical grounds”
• Flipkart-backed logistics unicorn BlackBuck has filed its DRHP with markets regulator SEBI for an INR 550 Cr IPO

Now, let’s take a detailed look at the list: 

Startups That Have Listed In 2024

This is not a listing of any kind. The startups have been listed in an alphabetical order | Data has been sourced from Inc42, respective DRHPs, MCA filings and other media reports | Asterisk (*) specifies reported numbers:

Awfis

Founded in 2015 by Amit Ramani, Awfis has evolved from just being a coworking network to a tech-enabled workspace solutions platform, catering to freelancers, startups, SMEs, large corporates, and MNCs.

The coworking space provider filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in December last year. The market regulator greenlit the company’s public issue in April 2024 

The startup made its debut on the bourses in May this year. It listed on the BSE at INR 432.25 per share, a premium of 12.8% to its issue price. Similarly, it opened on the NSE at INR 435 apiece – 13.5 % higher than the issue price.

Awfis reported a profit of INR 1.4 Cr in Q4 FY24 against a net loss of INR 13.8 Cr in the year-ago period. Operating revenue also jumped over 45% year-on-year (YoY) to INR 232.3 Cr in the quarter ended March 2024.

Go Digit General Insurance

Founded in 2016, Go Digit offers insurance policies across verticals like health, motor vehicle, travel, property, and more.

The insurtech unicorn refiled its DRHP with SEBI in March after the capital markets regulator flagged concerns over its employee stock appreciation rights scheme. 

The Bengaluru-based startup’s IPO comprised a fresh issue of shares worth INR 1,125 Cr and an OFS component of 5.47 Cr equity shares.

The Virat Kohli-backed startup made a lukewarm debut on Dalal Street in May, listing at a 5.15% to its issue price. The stock listed at INR 286 apiece on the NSE and INR 272 on the BSE. 

Go Digit’s profit after tax (PAT) surged 74% YoY to INR 101 Cr in Q1 FY25 from INR 58 Cr in the previous fiscal year. Gross written premium rose 22.2% to INR 2,660 Cr in the quarter ended June 2024 from INR 2,178 Cr in the year-ago period.

ixigo

Founded in 2006, ixigo started as a travel search website to help users compare flight deals. In FY20, it rebranded as an online travel aggregator to offer services such as flights, trains, bus tickets, hotel bookings and holiday packages.

Le Travenues Technology Ltd, the parent company of ixigo, refiled its DRHP with SEBI in February. The travel tech startup got the market regulator’s nod to launch the public issue in May.

Its IPO comprised a fresh issue of shares worth INR 120 Cr and an OFS component of 6.67 Cr shares worth up to INR 620 Cr.

The startup made a stellar debut on the bourses in June this year. While the stock opened at INR 138.10 per share on the NSE, a premium of 48.5% from the issue price of INR 93, it made its debut at a premium of 45.16% on the BSE. 

Prior to that, the OTA’s public issue also saw high demand and was oversubscribed 98X. 

In Q4 FY24, ixigo posted a PAT of INR 7.4 Cr, up 55.2% from INR 4.7 Cr in the year-ago period. Meanwhile, revenue from operations jumped 20.4% YoY to INR 164.8 Cr Cr during the quarter compared to INR 136.9 Cr in Q4 FY23.

Menhood

Founded in 2019 by Dushyant Gandotra, Divya Gandotra and Shivam Bhateja, Menhood is a D2C men’s grooming brand that sells products such as trimmers, intimate perfumes, intimate wash and moisturiser, among others.

The startup’s parent entity Macobs Technologies Limited filed its DRHP in January 2024 for an IPO that comprised a fresh issue of 25.95 Lakh shares. Menhood’s public issue saw healthy response and was oversubscribed 157.5 times. 

The Jaipur-based brand eventually listed on NSE Emerge on July 24 at INR 96 apiece, a 28% premium to its issue price of INR 75.

TAC Infosec

Founded in 2016, TAC Infosec (also known as TAC Security) is a SaaS-based cybersecurity startup. It offers risk-based vulnerability management and assessment solutions, cybersecurity quantification, and penetration testing to enterprises.

The Vijay Kedia-backed startup filed its DRHP in January to list on the NSE’s small and medium enterprise (SME) platform NSE Emerge. 

TAC Infosec’s IPO only consisted of a fresh issue of 28.29 Lakh equity shares. The shares listed on NSE Emerge in April at INR 290, a whopping 173.6% premium over the issue price of INR 106.

The startup posted a net profit of INR 6.33 Cr in FY24, a 23% jump from INR 5.12 Cr in FY23. Operating revenue zoomed 17% to INR 11.84 Cr in FY24 from INR 10.09 Cr in FY23.

TBO Tek

Founded in 2006, Travel Boutique Online (TBO) is a B2B travel portal that provides solutions to travel agents and tour operators. It offers white-label solutions, hotel and flight booking APIs and dynamic packages, among others.

The Delhi NCR-based company filed its DRHP with SEBI in November last year. The market regulator granted approval for its public listing in April.

Shares of TBO Tek listed on the NSE in May at a premium of 55% to the issue price. The stock made its debut at INR 1,426 against the issue price of INR 920. On the BSE, the stock listed at INR 1,380, a 50% premium to the issue price.

TBO Tek logged a 64% jump in PAT to INR 46.4 Cr in Q4 FY24 from INR 28.2 Cr in the year-ago quarter. Revenue from operations stood at INR 369 Cr during the period under review, a 31% increase from INR 281.4 Cr in Q4 FY23.

Trust Fintech

Founded in 1998 by Hemant Chafale, Heramb Ramkrishna, and Mandar Kishor Deo, Trust Fintech is an enterprisetech company that offers SaaS products and fintech solutions for ERP implementation, and offshore IT services for the BFSI sector. 

The fintech SaaS company filed its DRHP with NSE Emerge to raise funds via an IPO in February this year and listed on the SME platform just two months later in April. 

It witnessed an oversubscription of 101X for its public issue on the back of huge demand from retail investors and non-institutional investors. Eventually, it listed at a premium of 42% at INR 143.25 apiece as against its issue price of INR 101 per share.

Trust Fintech saw its net profit jump 210% to INR 12.5 Cr in the financial year 2023-24 (FY24) from INR 4 Cr in FY23. Meanwhile, operating revenue jumped 55.4% to INR 35 Cr in the period under review as against INR 22.5 Cr in FY23.

Indian Startup IPOs In Pipeline

*As per reports

AITMC Ventures

Founded in 2016, AITMC Ventures offers drone training and other skill development programmes in the agriculture sector. So far, it has set up 46 centres across India for research, development, training, and testing of drone technology in agriculture.

The integrated agri-drone company filed its DRHP in October last year to list on NSE Emerge. 

The Gurugram-based startup IPO will comprise a fresh equity offering of up to 2.07 Cr shares. It won’t have an OFS component.

The startup reported revenue of INR 21.44 Cr and profit of INR 4.81 Cr in FY23.

Ather Energy

Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy is one of the major players in the Indian electric two-wheeler market. It manufactures and services electric two-wheelers and operates its own charging infrastructure.

The EV major has raised more than $431 Mn from Hero MotoCorp, GIC, Tiger Global, among others, across multiple rounds since its inception. 

In June 2024, Ather Enegery’s board passed a resolution to convert the startup into a public company from a private entity previously. Previously, reports surfaced that the company had roped in HSBC Holdings Plc, Nomura Holdings Inc, and JP Morgan Chase & Co to helm its IPO. 

The company was said to be eyeing a listing in the second half of 2024 at a valuation of around $2 Bn.

Ather Energy clocked a net loss of INR 864 Cr in FY23, up 150% from INR 344.1 Cr in the previous year. Operating revenue jumped 4.3X YoY to INR 1,783.6 Cr during the year under review.

Avanse Financial Services

Incorporated in 2013, Avanse is an NBFC focussed on education financing for students and educational institutions in India. Its products cater to students looking to study higher education abroad and in India. 

The non-bank lender filed its DRHP in June 2024 for an INR 3,500 Cr IPO. The IPO will comprise a fresh issue of INR 1,000 Cr and an OFS component of shares worth up to INR 2,500 Cr.

Last reported, SEBI returned the NBFC’s IPO papers on “technical grounds”. The startup will now have to refile its DRHP with the market regulator before moving ahead with the public listing. 

Backed by the likes of Warburg Pincus, International Finance Corporation (IFC) and Kedaara Capital, the startup last raised INR 1,000 Cr in a funding round led by Abu Dhabi-based investment firm Mubadala Investment Company in March 2024.

As per the DRHP, Avanse’s net profit rose to INR 342.4 Cr in the financial year 2023-24 (FY24) from INR 157.71 Cr in the previous fiscal year. Operating revenue grew to INR 1,726.9 Cr from INR 989.5 Cr in FY23.

Bira 91

Founded in 2015 by Ankur Jain, Bira 91 sells craft, lager and strong beers. It also sells non-alcoholic beverages.

Backed by Peak XV Partners, Sofina and DS Group, Bira 91 has raised $449 Mn in funding across multiple rounds. 

In December 2022, the startup converted into a public company and renamed itself as B9 Beverages Limited. However, the beverage startup is yet to file its DRHP with the SEBI.

In July 2024, reports said that the alco-beverage brand was planning to list on the bourses in 2026 and has roped in investment banking firm Morgan Stanley to helm its pre-IPO process.

The Delhi NCR-based beer brand reported an operating revenue of INR 824.3 Cr in the year ended March 2023, up 15% from INR 718.8 Cr in FY22. Meanwhile, net loss jumped 12% YoY to INR 445.4 Cr in FY23.

BlackBuck

Founded in 2015 by Rajesh Yabaji, Chanakya Hridaya and Rama Subramaniam, BlackBuck operates an online marketplace for inter-city full truck load (FTL) transportation. It claims to be the largest online trucking platform in India, and connects with suppliers with truckers.

The Flipkart-backed logistics unicorn filed its IPO papers with SEBI in July 2024. Its public issue will comprise a fresh issue of shares worth INR 550 Cr and an OFS component of up to 2.16 Cr shares.

Backed by the likes of Tiger Global, Accel, Peak XV Partners and Goldman Sachs, BlackBuck has raised more than $360 Mn in funding to date. 

As per its DRHP, the logistics unicorn reported a net loss of INR 193.9 Cr in FY24, down 33% from INR 290 Cr in the previous year. Operating revenues jumped 69% YoY to INR 296.9 Cr in the fiscal ended March 2024. 

FirstCry

Founded in 2010, FirstCry is an omnichannel mother and kids-focused marketplace. It sells diapers, toys, apparel and cribs, as well as provides daycare facilities and runs a chain of play schools and preschools in India.

The Pune-based startup refiled its draft IPO prospectus in April following a directive from SEBI to include key metrics in its DRHP, first filed in December 2023. The company received the market watchdog’s approval for a public listing in July.

As per the DRHP, FirstCry’s IPO will comprise a fresh issue of shares worth INR 1,816 Cr and an OFS component of 5.4 Cr equity shares.

FirstCry clocked sales of INR 4,814 Cr and reported a loss of INR 278.2 Cr in the first nine months of the fiscal year ended March 2024 (FY24).

Flipkart

Binny Bansal and Sachin Bansal founded Flipkart in 2007 and later sold a majority of the company to Walmart in 2018 for $16 Bn. Since then, the ecommerce major has become India’s biggest ecommerce marketplace and has diversified into a host of new areas, including fintech, and travel aggregation. 

The ecommerce major, which is also backed by Google, was last valued at $35 Bn during a $1 Bn fundraise that saw participation from the two investors. 

Just like its sister arm PhonePe, the company is vying for a 2026 IPO. Its B2C arm, Flipkart Internet Private Limited, reported an operating revenue of nearly INR 15,000 Cr mark in the financial year ended March 31, 2023. The marketplace arm’s operating revenue zoomed 42% to INR 14,845.8 Cr in FY23 from INR 10,477.4 Cr in FY22.

Flipkart Internet primarily earns revenue through commission charges and other services it offers to merchants, including advertising of products. Including other income, the B2C arm’s total revenue rose 41% to INR 15,044 Cr during the year under review from INR 10,640.5 Cr in FY22.

Garuda Aerospace

Founded in 2015 by Agnishwar Jayaprakash, Garuda Aerospace designs, manufactures and sells drones. Its offerings also include drone-as-a-service (DaaS) for use cases such as agriculture, defence, and mining. 

Backed by Venture Catalysts, Silver Swan Capital and Claris Capital, the startup has raised $28.2 Mn in funding till date. 

In a chat with Inc42 last year, Jayaprakash said that the company would commence its IPO proceedings post March 2024 and would list by October-November 2024.

InMobi

Founded in 2007 by Naveen Tewari, Piyush Shah, Mohit Saxena and Abhay Singhal, InMobi is an adtech platform that offers a suite of product discovery and monetisation solutions. 

Headquartered in Singapore, the SaaS startup also has offices in Bengaluru, New York, Beijing, London, Dubai, and several other locations.

Backed by the likes of Sherpalo Ventures, SoftBank and Kleiner Perkins, InMobi has raised more than $320 Mn in funding till date and was one of the first Indian new-age tech companies to enter the unicorn club in 2011. 

The SaaS startup is eyeing a public listing in India by 2026 at a valuation of about $10 Bn. However, this will not be InMobi’s first stab at an IPO. 

In 2021, it was reportedly planning for an IPO but shelved the plans due to adverse market conditions and funding winter.

MobiKwik

Founded in 2009, MobiKwik started operations as a digital wallet. Since then, it has diversified its business to offer consumer payments, buy now pay later (BNPL), and payment gateway services.

The Delhi NCR-based startup has also introduced a Soundbox-like device, called Vibe, to take on Paytm and PhonePe.

The fintech unicorn refiled its DRHP with SEBI in January to raise INR 700 Cr through a fresh issue of equity shares, down from its earlier attempt to go public in 2021 when it tried to raise INR 1,900 Cr.

Besides, the startup managed to turn profitable in the first six months of FY24. In the first two quarters of FY24, it clocked a net profit of INR 9.5 Cr against a loss of INR 83.8 Cr in the entire of FY23. Meanwhile, revenue from operations stood at INR 381 Cr in H1 FY24, nearly 70% of the startup’s INR 539 Cr top line in the entire FY23.

Ola Cabs

A brainchild of Bhavish Aggarwal, Ola Cabs operates a mobility platform that offers ride-hailing and food delivery services. 

Backed by SoftBank, Ola Cabs has raised more than $3.84 Bn in funding till date and is one of the biggest players in the country in the ride-hailing space. 

Last reported, Ola Cabs was holding talks with investment banks like Goldman Sachs, Bank of America, Citi, Kotak, and Axis to helm its IPO. As per the reports, the company was looking to raise $500 Mn via its public listing at a nearly $5 Bn valuation. 

Ola parent ANI Technologies trimmed its loss by nearly half to INR 772.2 Cr in FY23 from INR 1,522.3 Cr in the previous year. Operating revenue rose 42% YoY to INR 2,799.3 Cr .

Ola Electric

Founded in 2017, Ola Electric is an electric two-wheeler maker that currently retails a portfolio of five scooter models. The Bhavish Aggarwal-led startup is also planning to launch an electric autorickshaw in the coming days.

The Bengaluru-based startup filed its DRHP with SEBI in December last year for an INR 5,500+ Cr IPO. 

Ola Electric secured approval from the markets regulator for its much-awaited IPO in late June. As per its red herring prospectus (RHP), Ola Electric’s IPO will comprise a fresh issue of shares worth up to INR 5,500 Cr and an OFS component of up to 8.49 Cr shares.

The EV maker’s public issue will open for retail subscription on August 2 and will close on August 6. Meanwhile, anchor bidding will take place on August 1. The company has set a price band in the range of INR 72-76 per equity share for its upcoming IPO.

As per reports, the Temasek-backed startup is eyeing a valuation between $4.2 Bn and $4.4 Bn for the public listing. 

In FY24, Ola Electric’s net loss widened 7.6% to INR 1,584.4 Cr in FY24 from INR 1,472.1 Cr in the previous fiscal. Meanwhile, it reported sales of INR 5,009.8 Cr during the period under review, up 90% from INR 2,630.9 Cr in FY23.

OYO

Founded in 2012, OYO is a travel tech startup that offers vacation homes, casino hotels, coworking spaces, budget hotels, corporate stays and more. The hospitality major is also planning to launch 13 self-operated hotels under its premium brand ‘Palette’ by 2024-end.

In May 2024, the Delhi NCR-based hospitality major officially withdrew its IPO documents from the market regulator SEBI. Interestingly, this was OYO’s second attempt at a public listing. 

In early-2024, OYO was said to be looking to raise $400 Bn to $600 Bn, nearly half of its earlier attempt in 2021 when it was looking to raise INR 8,430 Cr ($1.2 Bn).

OYO narrowed its net loss by 34% to INR 1,286.5 Cr in FY23 from INR 1,941.5 Cr in FY22. Operating revenue grew 14% to INR 5,463.9 Cr in FY23 from INR 4,781.3 Cr in the previous fiscal year.  Its cofounder and CEO Ritesh Agarwal claimed that the startup reported a net profit of INR 100 Cr in FY24.

PayMate

Founded in 2006 by Ajay Adiseshann, PayMate is a full-stack supply chain payments automation platform that offers B2B payments solutions for SMEs and enterprises. 

The Mumbai-based fintech startup filed its DRHP in 2022 for an INR 1,500 Cr IPO. At the time, PayMate said that its public issue would comprise a fresh issue of INR 1,125 Cr and an OFS of INR 375 Cr. 

Eventually, the market regulator returned the company’s DRHP and asked PayMate India to refile the IPO papers with certain updates. In early 2023, the company reportedly said that it was planning to refile its DRHP but there has been no clarity on its IPO plans since then. 

In FY23, the startup trimmed its net loss by 3.5% YoY to INR 55.7 Cr in FY23. Operating revenue jumped 11.7% YoY to INR 1,350.1 Cr in FY23.

PayU

The Prosus-backed fintech major is also gearing up for a public listing in India. In October last year, the company was reportedly mulling seeking regulatory approval for a $500 Mn IPO. 

At the time, it was said that PayU had appointed Goldman Sachs, Morgan Stanley and Bank of America as advisors for the IPO, reportedly slated to happen by 2024-end. 

In  November, the then interim Prosus CEO Ervin Tu said that PayU could be ready for a public listing in India by the second half of calendar year 2024. 

As per the Dutch investor’s annual report, PayU India clocked a revenue growth of 11% year-on-year (YoY) to $444 Mn in FY24. However, this was lower than the 31% revenue growth reported in FY23 and over 40% jump it clocked in FY22.

PhonePe

Founded in 2015 by Sameer Nigam, Rahul Chari and Burzin Engineer, PhonePe is India’s biggest digital payments platform and accounts for nearly half of all Unified Payments Interface (UPI) payments processed in the country. 

Since its inception, it has morphed into a full-fledged financial services platform offering a host of digital payment services, mutual funds and insurance products to customers. The fintech major was acquired by ecommerce juggernaut Flipkart in 2016. 

Six years later, Flipkart parent Walmart set into motion its plans to hive off PhonePe as a separate entity and redomicile the fintech company back to India. In late-2022, PhonePe flipped back to its home turf, with an eye on listing on Indian bourses. 

However, in June 2024, a senior Walmart executive said that PhonePe’s IPO could take a couple of years, setting the stage for a 2026 IPO. 

The fintech major saw its consolidated net loss widen 39% YoY to INR 2,795.3 Cr FY23. Revenue soared 77% YoY to INR 2,913.7 Cr during the year under review. 

Portea Medical 

A brainchild of Krishnan Ganesh and Meena Ganesh, Portea Medical is a healthtech startup that offers services such as maternal care, physiotherapy, nursing, lab tests, counselling and critical care. 

Backed by Accel, InnoVen Capital, Alteria Capital and British International Investment, Portea Medical has raised more than $92.3 Mn across multiple rounds till date.

The healthtech startup filed its IPO papers in July 2022 for an INR 800 Cr IPO. As per its DRHP, the IPO then comprised a fresh issue of equity shares worth INR 200 Cr and an OFS component of up to 56.25 Mn shares.

In April 2023, it received approval from the market regulator to go ahead with the public listing on the BSE and NSE. However, there have been no further updates on its IPO plans.

Portea Medical posted a net loss of INR 53 Cr in FY23, up from INR 40 Cr in the previous year. Revenue from operations declined 3.3% YoY to INR 145 Cr during the year under review. 

Smartworks

Founded in 2016 by Neetish Sarda and Harsh Binani, Smartworks is a shared workspace provider that offers customisable coworking solutions for enterprises. 

The startup has raised $41 Mn in funding till date and is backed by the likes of Ananta Capital, Keppel Land and Plutus Capital. 

Taking the first step towards its IPO, the startup turned into a public company in July 2024 and changed its name to Smartworks Coworking Spaces Ltd from Smartworks Coworking Spaces Private Ltd previously.

It reported a net loss of INR 101 Cr in FY23, up 44% YoY. Meanwhile, operating revenue nearly doubled to INR 711 Cr during the year under review from INR 360 Cr in FY22. 

Swiggy

Swiggy commenced operations as an online food delivery platform in 2014. In 2020, it also entered the grocery delivery business with Swiggy Instamart. 

Now, the Bengaluru-based startup has begun diversifying beyond the quick commerce grocery business. Swiggy Instamart now also offers high-value products, allowing shoppers to order fitness and electronics devices. 

Swiggy filed its DRHP with markets regulator SEBI via the confidential pre-filing route for an IPO worth INR 10,414.1 Cr ($1.2 Bn) in April. The IPO will include a fresh issuance of shares worth INR 3,750.1 Cr (about $449 Mn), and an OFS of INR 6,664 Cr (about $799 Mn), as per regulatory filings. 

On top of that, Swiggy is also looking for a INR 750 Cr pre-IPO funding round. 

Swiggy reportedly posted a net loss of $207 Mn (INR 1,730 Cr) during the first nine months of FY24 as against a net loss of INR 4,179.3 Cr in FY23. Revenue from operations stood at $1.02 Bn (around INR 8,505 Cr as per current exchange rates) during April-December 2023, as compared to INR 8,264.4 Cr in the entirety of FY23.

Ullu

Founded by the husband-wife duo of Vibhu Agarwal and Megha Agarwal, Ullu Digital is a Mumbai-based OTT platform that deals with the distribution, promotion, exhibition, marketing and delivery of video content on its streaming platform Ullu. 

It filed its DRHP with the BSE SME for an IPO in February this year. As per the draft papers, the company’s IPO would comprise a fresh issue of 62.63 Lakh shares and would not have OFS component.

Ullu Digital plans to raise INR 135-INR 150 Cr via the IPO, which, if approved, would become the biggest SME IPO till date. 

The platform plans to use the net proceeds raised via the IPO to meet its expenses for production of new content, purchase of international shows, tech investment, and to meet the working capital requirements.

While Vibhu Agarwal holds a 61.75% stake in Ullu Digital, Megha Aggarwal owns 33.25% of the company. 

In March 2024, the OTT streaming platform came under the scanner of multiple government authorities including SEBI, the Ministry of Corporate Affairs and the Ministry of Electronics and Information Technology (MeitY) for allegedly selling “pornographic” content using school children.

Unicommerce

Founded in 2012 and acquired by Snapdeal in 2015, Unicommerce is an ecommerce SaaS startup that enables sellers to manage their inventory across all online marketplaces. It offers integrations with all major ecommerce platforms active in India.

Unicommerce filed its DRHP in January and received regulatory approval on July 1. The startup plans to sell up to 2.98 Cr shares through the IPO route.

The SoftBank-backed startup’s IPO will only have an OFS component, with no fresh issuance of shares. 

Unicommerce’s net profit stood at INR 6.3 Cr in H1 FY24. In FY23, the startup clocked a 8% jump in its net profit to INR 6.4 Cr as against INR 6 Cr in the previous fiscal year. 

Meanwhile, the ecommerce SaaS startup reported an operating revenue of INR 51 Cr in H1 FY24. In FY23, the startup’s operating revenue shot up 52% to INR 90 Cr from INR 59 Cr in FY22.

Zappfresh

Founded by Deepanshu Manchanda and Shruti Gochhwal in 2015, Zappfresh is a D2C meat startup that supplies meat from farms to customers within 90 minutes. 

Taking its first step towards IPO,the startup converted into a public entity in April 2024 after dropping “private” from its name. As per its RoC filings, the company changed its name to DSM Fresh Foods Limited from DSM Fresh Foods Private Limited previously. 

Last Updated: July 30, 10:00 AM IST

The post Indian Startup IPO Tracker 2024 appeared first on Inc42 Media.

The government on Monday (July 29) informed the Parliament that the over 1.4 Lakh startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) have created over 15.5 Lakh direct jobs in the country. 

Minister of State (MoS) (independent charge) for skill development and entrepreneurship Jayant Chaudhary made the revelation in response to a question from Bharatiya Janata Party’s (BJP) Member of Parliament (MP) Dilip Saikia. 

“Sustained efforts by the government under the Startup India initiative have led to an increase in the number of recognised startups to 1,40,803 as on 30th June 2024. The recognised startups have reported to have created over 15.5 lakh direct jobs,” said MoS Chaudhary.

He added that 3.02 Lakh startups, supported under the Start-up Village Entrepreneurship Programme, have generated around 6.2 Lakh jobs in India’s rural belt. The MoS added that the startups incubated under the technology incubation and development of entrepreneurs (TIDE) 2.0 scheme have created employment for 8,556 persons. 

Chaudhary also underlined that 1,235 DPIIT-recognised startups have been supported under the TIDE 2.0 scheme, of which 1,708 are from agriculture and allied sectors. 

This is in line with what the Economic Survey said earlier this month. It said that the 1.17 Lakh DPIIT-recognised startups created over 12.42 lakh direct jobs, creating significant economic impact, as of 2023. 

The Centre has taken a number of steps over the last few years to give an impetus to the country’s startup ecosystem for job and value creation.

In her budget speech last week, finance minister Nirmala Sitharaman provided a relief to the startup ecosystem by fulfilling the long-standing demand of abolishment of the infamous angel tax.

She also announced a number of other steps which would boost the Indian startup ecosystem, like creation of an INR 1,000 Cr VC fund for space economy, reduction of the tax deducted at source (TDS) for ecommerce platforms to 0.1% from 1%, and setting up ecommerce export hubs in PPP model.

India boasts the third-largest startup ecosystem in the world and is home to 116 unicorns and 112 soonicorns. Earlier today, ride-hailing startup Rapido became the third unicorn of the year.

As per an Inc42 report, homegrown startups have raised over $147 Bn since 2014.

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With India’s increasing emphasis on technological advancement and self-reliance, the nation has experienced a significant surge in emerging technology startups over the past decade. 

From the expansion of electric vehicles to the integration of drones and from the ascent of private players in spacetech to a notable influx of private funding in technology, these achievements very well underline the vibrant landscape of India’s tech sector.

Similarly, India’s semiconductor ecosystem has gained substantial momentum, bolstered by the government’s support for fabless chip manufacturing startups, semiconductor design, and packaging companies.

In 2021, the Indian government sanctioned the Semicon India programme, allocating INR 76,000 Cr to provide incentive support to companies engaged in silicon semiconductor fabs, display fabs, compound semiconductors/sensors fabs, and semiconductor packaging and design.

Subsequently, in 2022, the India Semiconductor Mission (ISM) was launched to build a vibrant semiconductor and display ecosystem to enable India’s emergence as a global hub for electronics manufacturing and design. 

The government introduced the ‘Semicon India Future Design: Design Linked Incentive (DLI) Scheme, which offers financial incentives and design infrastructure support for various stages of semiconductor development and deployment, including Integrated Circuits (ICs), chipsets, System on Chips (SoCs), Systems and IP cores, and semiconductor-linked design.

Further, the ‘Make in India’ initiative, aimed at reducing dependence on imported components and bolstering the domestic tech ecosystem, has been a driving force behind these initiatives in recent years.

Presently, India has forged agreements with several global semiconductor manufacturing giants to establish manufacturing facilities in the country. With companies like Advanced Micro Devices (AMD), Micron, and Qualcomm making investments in India, alongside the emergence of more venture capital-backed startups, the semiconductor industry in India is poised for further expansion.

Amid all this, the Union Cabinet on February 29 approved the country’s first semiconductor fab to be set up by the Tata Group in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC). 

It is imperative to mention that the country’s bend towards growing its semiconductor ecosystem dates back to 1976 when the then Cabinet of India, under the leadership of Prime Minister Indira Gandhi, granted its assent to the formation of Semi-Conductor Laboratory in Mohali, Punjab.

Since then, we have come a long way in fostering India’s semiconductor ambitions. Joining in this endeavour are the country’s new-age tech startups.

As per Inc42’s report, the Indian semiconductor market is expected to reach $150 Bn by 2030, up from $33 Bn in 2023, witnessing a 24% CAGR.     

In this piece, we have tried to compile some of these companies that have the potential to be remembered in the times to come for laying the strong foundation of the country’s impending semiconductor boom.

With that said, here is the list…

(Note: The list below is not meant to be a ranking of any kind. We have listed the Indian semiconductor startups in alphabetical order. We will be updating this list periodically if you would like to refer any startup, write to editor@inc42.com)

AGNIT Semiconductors

Established in 2019, AGNIT Semiconductors specialises in Gallium Nitride (GaN) semiconductor technology. Headquartered in Bengaluru, the company focusses on designing and producing GaN materials (wafers) and electronic components primarily tailored for radio-frequency applications.

AGNIT’s GaN components find extensive applications in the defence and telecommunication sectors.

In 2023, the Ministry of Defence inked a contract with AGNIT for the design and development of advanced GaN semiconductors, slated for integration into the next generation of wireless transmitters for defence applications, including radars and electronic warfare jammers.

The founding team comprises Digbijoy Neelim Nath, Hareesh Chandrasekar, Madhusudan Atre, Mayank Shrivastava, Muralidharan Rangarajan, Shankar Kumar Selvaraja, and Srinivasan Raghavan.

According to the company’s website, AGNIT’s proprietary technology stems from over 15 years of research and development conducted at the Indian Institute of Science, Bengaluru.

Aura Semiconductor

Founded in 2011 by Srinath Sridharan, Aura Semiconductor or Aurasemi is a fabless semiconductor company that designs and supplies the industry with mixed-signal IC solutions for various applications. 

The startup specialises in high-performance products for markets, including IoT radios, enterprise timing, and portable audio. 

It makes products in categories such as timing, micro-electromechanical systems (MEMS), power, RF, IoT and sensors. Recently, Nasdaq-listed precision timing company SiTime Corporation acquired all time-related products from Aurasemi.

Headquartered in Bengaluru, Aurasemi also has its offices in China, the UK, and the US. Celesta Capital is one of the VC investors in the startup.

Blueberry Semiconductors

Bengaluru-based Blueberry Semiconductors is one of the leading very large scale integration (VLSI) startups in India. It provides solutions and services in niche areas of ASIC/SoC, embedded product engineering supported by ML, industrial IoT and AI.

The 2017-founded startup delivers to clients on their latest and technically advanced projects in industries like aerospace, automotive, defence, AI, 5G, and RAM, among others. Its partners range from Intel and Mahindra to Microsemi and SanDisk.

Chipspirit

Founded in 2018, Chipspirit is a Bengaluru-based services and solutions provider in the semiconductor space.

Its application-specific integrated circuits (ASIC) design services has a special focus on design and turnkey projects. On the other hand, it also claims to provide fully customisable hardware security solutions.

Chipspirit’s Abhed-1 is a dedicated secure hardware-based offline and online encryption device for transacting classified data over public or open Data networks.

The semiconductor company won the iDEX challenge in March 2019. It is now co-developing its hardware security solutions with Indian Defence under the Centre’s Make-In-India initiative.

As per MeitY’s website, Chipspirit is also one of the beneficiaries of its DLI scheme.

Cientra

Founded in 2015 by Uday Joshi and Sandip Kadtane, Cientra is a semiconductor solutions company, specialising in VLSI, ASIC, FPGA, SoCs, catering to telecom (4G, 5G, IoT), automotive (SDV, ADAS, connectivity, EV) and embedded software.

The semiconductor design solutions of the company include register-transfer level (RTL) design, design verification, physical design, and analogue design and layout offering.

Cientra is a multinational company with offices in India, the USA, and Germany. Last year, the company launched a vendor-agnostic 5G IoT aggregator solution in partnership with Amantya Technologies, which they claimed to be the ‘world’s first’.

FermionIC Design

Founded in 2020, Bengaluru-based FermionIC Design is a fabless semiconductor startup developing ICs for high-speed wireline and RF communication market. Its current product portfolio includes a highly integrated beamformer core chip in silicon-germanium (SiGe) process that enables the X-band millimetre-wave communications for active electronically scanned array (AESA), sat-comm applications, and others. 

The startup’s mixed signal product family includes ultra-low-noise low dropout (LDO)-ICs, low-phase noise crystal oscillators and Serialiser/Deserialiser (SerDes) products. 

Founded by Gautam Kumar Singh, Prasun Bhattacharyya, Abhra Bagchi, and Shabaaz Syed,  FermionIC Design has remained bootstrapped so far. It claims to have multiple global and Indian OEM customers who are building their SoCs and systems using FermionIC products. 

Last year, the Minister of State for Electronics & IT Rajeev Chandrasekhar announced FermionIC Design as one of the first set of startups selected under the government’s Semicon India Future Design DLI scheme. 

Incore Semiconductors

Founded in 2018, InCore Semiconductor is building 5th generation RISC/RISC-V processor cores in India. RISC or reduced instruction set computer is a microprocessor architecture that utilises a reduced number of computer instruction types, hence enabling systems to operate at higher speeds. 

InCore, founded by Arjun Menon, Gautam Doshi, GS Madhusudan, and Neel Gala, is headquartered at the IIT Madras Research Park. In 2023, the startup raised $3 Mn from Peak XV Partners.

The startup aims to make India a powerhouse in the RISC-V solution space. Its processor cores power high-performance application-class processors, area/power-optimised embedded processors, and more.

The startup claims to bring a high degree of automation to the processor and SoC design process.

Mindgrove Technologies

Mindgrove Technologies is a Chennai-based semiconductor startup founded in 2021. It works in the space of design and production of SoCs. 

Incubated at IIT Madras, Mindgrove uses the indigenous RISC-V Shakti cores to power its chips. 

The startup is currently working on its inaugural chip, Secure IoT, which is designed for a range of consumer electronics devices, including TVs, washing machines, air conditioners, and refrigerators. Its multi-processor chip comes with security accelerators, a true random number generator, and one-time programmable memory.

Founded by Shashwath T R and Sharan Srinivas J, the startup secured $2.32 Mn in seed funding in 2023 led by Peak XV Partners. Its other investors include names like Speciale Invest and Whiteboard Capital. 

Morphing Machines

Morphing Machines is a fabless semiconductor startup building IP products and solutions. Its patented product ‘REDEFINE’ is a many-core SoC platform, in which domain-specific architectures (DSAs) for mixed critical application tasks are instantiated on demand of any event. DSAs are specialised and optimised hardware designs tailored to specific application domains or industries. 

Its technology serves various industries, including avionics, automobile, and telecom. Besides, ‘REDEFINE’ helps accelerate a host of applications for Big Data Analytics, Genome Analytics, Augmented Reality and Virtual Reality, Large Scale Scientific Simulations, and immersive gaming and visualisations.

Morphing Machines has also received projects under the DLI and Chips2Startup (C2S) schemes from the Ministry of Electronics and Information Technology (MeitY).

Launched through the Technology Entrepreneurship initiative of the Indian Institute of Science at Bengaluru in 2005, Morphing Machines is a bootstrapped startup. Its founders are Dr S.K. Nandy, Dr Ranjani Narayan, and Deepak Shapeti. In June 2024, Morphing Machines secured $2.76 Mn in a seed funding round led by Speciale Invest.

Netrasemi

Founded in 2020, Netrasemi is a Kerala-based Edge AI semiconductor technology company building SOCs to enable the new-age need for optimal computing for smart IoT products. Netrasemi has a power-efficient deep-neural AI acceleration core (NPU) and a rich portfolio of silicon IPs to enable this. 

Its key target segments are surveillance, smart sensors, smart infrastructure, machine vision and industry 4.0, robotics, drones, and autonomous vehicles, among others.

The company’s domain-specific architecture (DSA), IP-rich SOCs, AI development tools,  flexible SDKs, and platform reference designs help IoT product and solution makers to go to market with cost-effective and power-efficient advanced AI chipsets catering to their specific domains.

Its A2000 SOC has smart vision capability with advanced real-time video analytics and vision processing capabilities. On the other hand, NETRA-R1000 is a RISC-V-based SOC for smart sensor applications.

Netrasemi is also a beneficiary of the Central government’s DLI scheme.

Oakter

Oakter is an Original Device Manufacturer (ODM), which designs and manufactures electronic smart devices, including fintech giant Paytm’s revolutionary soundboxes.

Launched in 2015 by a founding team from IIT Delhi, the Noida-based Oakter soon became a leading name in the smart plugs market. In 2017, the startup became the launch partner for Amazon Alexa in India. 

In 2019, the startup pivoted to contract manufacturing. Over the years, Oakter fulfilled multiple B2B contract manufacturing orders from the likes of Sony (for its BRAVIA TV), Saregama (for Carvaan), and Syska, among others.

In 2020, Oakter collaborated with DRDO to manufacture Covid safety products.

With the emergence of new-age technologies, the startup has also collaborated with EV charging aggregation platform, ElectricPe, to develop its charge points.

Its early backers include IndiaQuotient and Flipkart founder Binny Bansal. As per publicly available data, the company is expected to have raised over $500K in total funding over the years.

Saankhya Labs

The 2007-founded Saankhya Labs claims to be the country’s first fabless semiconductor solutions company. Based in Bengaluru, the startup manufactures integrated circuits (ICs) and other components for various satellite and broadcast applications, including 5G New Radio, direct-to-mobile (D2M) broadcast, rural broadband connectivity, and satellite communication modems for IoT applications.

The startup also claims to have developed the world’s first production Software Defined Radios (SDR) chipsets, which enable converting radio signals into electronic signals and vice versa for a wide range of applications, including, but not limited to, smart TVs and set-top boxes.

Founded by Parag Naik, Vishwakumara Kayargadde, and Hemant Mallapur, Saankhya Labs is a subsidiary of listed broadband and wireless networking company Tejas Networks. Its former backers included the likes of Intel and General Motors, who exited the company a few years ago.

Recently, in February 2024, the Ministry of Electronics and Information Technology (MeitY) approved Saankhya Labs’ application to the Centre’s semiconductor Design Linked Incentive (DLI) scheme for the development of a System-on-Chip (SoC) for 5G telecom infrastructure equipment. 

As per publicly available data, the company is expected to have raised around $18 Mn in total funding. However, Inc42 couldn’t independently verify the exact amount of funds raised so far.

Sensesemi

Founded in 2014 by Vijay Muktamath, Sensesemi builds the next-generation secured connected AI Edge chip for varied applications in the field of Industrial IoT such as smart appliances, healthcare, and automotive. Its flagship product is named SenseSoC.

By embedding AI capabilities directly onto the chip, it claims to enable edge inferencing, bringing real-time decision-making to the devices.

Sensesemi also won financial support under the Centre’s DLI Scheme earlier this year. 

On winning the government support, company founder Muktamath said, “As part of the DLI Scheme, Sensesemi will be developing the SoC for IoMT (Internet of Medical Things) and IoT devices, that shall have MCU and wireless IP integrated with ultra-low power analogue front end with AI inferencing IP.”

SignOff Semiconductors

Founded in 2015, Signoff Semiconductors is one of the pioneering Indian startups in semiconductor design services. 

Involved in very-large-scale integration (VLSI) services, the company has developed in-house capabilities to help customers with the designs of ICs — both application-specific integrated circuits (ASICs) and field programmable gate arrays (FPGAs) — that function in the areas of AI, ML, Edge IoT, as well as general-purpose processors.

Signoff claims to serve its clients with a range of services, including physical design, full custom analogue and digital custom layout and verification, register-transfer level (RTL) design, verification, embedded, and firmware.

The semiconductor company has served domains such as automotive, medical, connected edge, and consumer electronics.

Signoff currently has offices in Bengaluru, Hyderabad, Toronto, and the US.

Silizium Circuits

Hyderabad-based Silizium Circuits is an analog radio frequency (RF) IP focussed company. It develops indigenous IPs for a range of wireless applications, including 5G, IoT, Global Navigation Satellite Systems (GNSS), smart mobility, AI, and ML.

Founded in 2020, the startup aims to replace analogue RF IP imports in India with indigenous Silizium Circuits’ IPs by 2025 and become the largest analogue, RF, mixed signal IP exporter from India by 2030.

In 2021, Silizium Circuits became one of the eight NXP FabCI 2021 cohort qualifiers, which is a two-year incubation and acceleration programme.

Founded by Rijin John and Dr Arun Ashok, Silizium Circuits also provides a faculty upskilling programme to guide, train, and upskill the electronics/electrical faculty community in the country. 

Terminus Circuits 

Founded in 2010 by Dr Sankar Reddy, Terminus Circuits designs and develops high-speed serial links, which are a type of communication protocol that transmits data in a single differential signal, enabling data and clocking information to be sent simultaneously.

The startup claims to offer a one-stop solution for all Serialiser/De-Serialiser (SerDes) designing. Besides, ethernet SerDes, it is also a leading provider of PCIe (peripheral component interconnect express), USB (Universal Serial Bus), and MIPI (mobile industry processor interface) to OEMs for big data, AI, ML, server chips, and 5G applications.

Terminus Circuits has a partnership with Taiwan Semiconductor Manufacturing Company (TSMC), one of the biggest chip producers in the world. 

Vervesemi

Incorporated in 2017, Vervesemi is a fabless semiconductor company developing application-specific integrated circuits (ASICs) for sensors and wireless devices.

The company has two business verticals – Analog-RF ASIC-Data converters and Analog IPs. It develops products and analogue IP solutions for various semiconductor application markets, including energy, 4G/5G market, medical, consumer, and smart power.

Noida-based Vervesemi currently has two design centres in India. Earlier this year, it announced the launch of India-made semiconductor ASIC.

Last year, MeitY announced Vervesemi among the first set of startups selected under the Semicon India Future Design DLI scheme.

The startup claims to have over 25 patents in its kitty.

This is a running article, we will keep adding more names to the list. If you would like to refer any startup, write to editor@inc42.com.

Last updated on July 29, 2024

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Identifying promising startups is like finding a needle in a haystack. It takes immense effort to predict a startup’s future outcome before we make investment decisions. But what really differentiates the promising ventures from flameouts? 

The answer lies not in numbers on a spreadsheet but in a strong company culture! 

The Global Startup Ecosystem Report 2022 states that 90% of startups fail within the first five years. It means the success rate of startups is just 10%. That’s a scary statistic; nevertheless, it highlights the need for a robust foundation that promotes innovation, collaboration, and relentless grit among the workforce. That’s where culture comes in.

A startup’s culture comprises common views, values, and attitudes among those who build the organisation. Simply put, it is your company’s culture that motivates your team to work together and bounce back from setbacks.

So, what are the characteristics of an exemplary startup culture? Let’s find out.

Visionary Leaders

We all love a passionate leader, don’t we? As strategic venture capitalists, we too favour visionary founders who are passionate about their work and can create a picture of the future so vividly that we can practically smell the success. 

They are the ones who not only steer the ship but also inspire their teams to work passionately and become invested in the mission. Such founders are also transparent, share everything they know, and empower their people by setting solid examples.

Open Communication Is Key

Transparency and open communication are critical skills that successful business entrepreneurs leverage to empower their workforce. A study reveals that passionate employees are 12% more productive. 

When every team member in an organisation feels heard and valued, that’s when the magic begins. It drives collaboration and paves the way for a strong, supportive environment. And let’s not forget observing the team itself. The way they interact and treat each other tells you a lot. A team that gels and respects each other is a team that will win.

The Importance Of Adaptability

Early-stage startups are both incubators and hothouses for innovation and creativity. Yet innovation relies on how well teams can adapt to limited resources and to rapidly changing market conditions for success. It is, therefore, important for any startup to recuperate from setbacks and acclimatise with changing market conditions. 

We look for founders and teams who are resourceful and self-driven, who take ownership, and who are always learning and hustling, no matter what gets thrown their way. They should be willing to go the extra mile without constant external motivation. 

Founders who demonstrate a problem-solving mindset and a willingness to adapt their strategies to changing trends when necessary are more likely to emerge stronger amidst challenges.

VCs’ Role In Helping Build A Great Startup Culture

As strategic venture capitalists, we don’t simply invest money and walk away. We understand that the road to entrepreneurship is fraught with hardships, and we want to see our portfolio firms prosper by confidently overcoming all obstacles. 

Therefore, we also assess potential risks associated with team dynamics or a lack of established processes. We next evaluate whether these hazards can be minimised through mentorship. 

For instance, a team of talented individuals who struggle with collaboration might benefit from being paired with a mentor who can provide guidance on communication strategies and teamwork. 

So, we set them up with mentors/ workshops, and even connect them with other founders they can learn from. We also keep in touch, visit them regularly, and see how things are going and how their culture is evolving. We firmly believe that a shaky process can be fixed, but a bad culture can be a tough nut to crack.

A Strong Culture Is A Winning Culture

The bottom line? Venture Capitalists choose startups whose culture is aligned with their vision. Nonetheless, we understand that cultivating a good corporate culture requires time and consistent commitment, but the results of these efforts are monumental. 

It is what attracts the best people and gets you through the tough times besides driving you and your startup towards success. 

So, my advice to all startup founders is to value transparency and agility. Simultaneously, you must take care of your employees and focus on creating something unique. Prioritising openness, adaptability, and the well-being of both consumers and staff can greatly enhance your chances of attracting investment and establishing long-term success.

The post Why Strong Culture Is Key To Identifying Promising Early Stage Startups appeared first on Inc42 Media.

In a week in which finance minister Nirmala Sitharaman presented the first Union Budget of Modi government 3.0, new-age tech stocks rallied in line with the broader market and stock-specific developments.

Twenty one out of the 24 stocks under Inc42’s coverage ended the week with gains in the range of 0.26% to almost 11%. Shares of Paytm breached the INR 500 mark after a long time and the stock emerged as the biggest gainer this week with a 10.93% jump. Nykaa, Zomato and Mamaearth also rose this week.

Traveltech startups EaseMyTrip, Yatra, and ixigo gained this week after the finance minister announced a slew of initiatives in her budget speech to boost tourism.

The government announced support plans for comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor to boost the spiritual tourism sector. The finance minister allocated INR 2,479.62 Cr for the tourism sector for FY25, up 46% from the revised allocation of INR 1,692.10 Cr in FY24. 

Shares of geotech company MapMyIndia also soared over 5% this week as Sitharaman announced plans to digitise land records in urban India with GIS mapping.

Only three new-age tech stocks ended in the red this week – Awfis, TAC Infosec, and Yudiz, declining in a range of 0.8% to about 3%.

Meanwhile, the broader market continued its upward momentum this week. Sensex gained 0.9% to end at 81,332.72, while Nifty 50 rose 1.2% this week to end at 24,834.85.   

Commenting on the market performance this week, Geojit Financial Services’ head of research Vinod Nair said that the budget was both populist and prudent, and failed to spark any significant excitement in the market.

“The market has now recovered its losses from budget day, driven by positive US GDP data and expectations of improved global demand. Moving forward, the direction of the domestic market will likely be influenced by the progress of the earnings season,” he said.

Meanwhile, Prashanth Tapse, senior VP of research at Mehta Equities, said that Indian markets outperformed the global peers this week on the back of a strong buying support across the board. He attributed this resilience to the strong growth of the Indian economy and better-than-expected earnings reports of blue chip and mid-cap companies.

Amid the startup IPO rush, Jaipur-based D2C men’s grooming brand Menhood made iCts public market debut on the NSE Emerge this week and became the latest stock under Inc42’s coverage.

Overall, the total market capitalisation of the 25 new-age tech stocks under Inc42’s coverage stood at $63.27 Bn at the end of this week. The valuation of 24 new-age stocks stood at $60.99 Bn last week. 

Now, let’s take a deeper look at the performance of some of the listed new-age tech stocks this week. 

Paytm Gets Long-Pending Approval 

Shares of Paytm surged nearly 11% this week to cross the INR 500 mark after the company received the long-pending approval from the government to invest INR 50 Cr in its payments arm, Paytm Payment Services.

The stock surged 10% on Friday (July 26) after it was reported that the Vijay Shekhar Sharma-led company has secured the investment approval, which would allow it to apply for an online payment aggregator (PA) licence.

It is pertinent to note that Paytm reported an underwhelming financial performance in the first quarter of the fiscal year 2024-25 (Q1 FY25), with its net loss widening 134% year-on-year to INR 840.1 Cr.

Paytm was in the news this week for a number of other reasons: 

• Brokerage firms Emkay Global, JM Financial, and Motilal Oswal retained their “reduce”, “sell”, and “neutral” ratings on the stock, respectively, following the declaration of Q1 results.
• Paytm joined hands with Axis Bank to offer point of sale solutions and card payment machines to its merchant network on July 23.
• Paytm received a fine of INR 250 for failure to pay stamp duties pertaining to the allotment of ESOP granted by the company. Moreover, an additional penalty of INR 370 has been imposed for similar non-compliance.

Commenting on the stock’s performance, Amol Athawale, VP of technical research at Kotak Securities, said, “We maintain a neutral stance on Paytm, viewing the recent movement as a potential pullback or technical rebound. We anticipate short-term bullish trends to persist. It is difficult to predict in the long term as there’s been too much volatility in the stock.” 

Go Digit Posts Robust Q1 Numbers 

Insurtech unicorn Go Digit this week reported a 74% increase in its profit after tax (PAT) to INR 101 Cr in Q1 FY25 from INR 58 Cr in the year-ago quarter. Its net earned premium also rose to INR 1,824 Cr during the period under review from INR 1,475 Cr in the year-ago quarter. 

Following the disclosure of Q1 numbers on June 25, the stock rallied over 8% to touch INR 362.25 apiece during the intraday trading session on the BSE on June 26. Overall, Go Digit rose 0.26% this week to end at INR 345.45. 

Athawale said that Go Digit’s immediate resistance level is INR 370 and support for the stock is seen at INR 335. He added that the stock would see a strong rally if it breaches INR 375 mark, while it can come down to INR 310-315 on the lower level.

Menhood Makes A Strong Debut

D2C brand Menhood parent Macobs Technologies became the third new-age entity to list on NSE Emerge this week, after TAC Infosec and Trust Fintech.

Menhood’s IPO was oversubscribed 157.5X, with investors bidding for 40.89 Cr shares as against 25.95 Lakh shares on offer.

The D2C brand got listed at INR 96 apiece, a 28% premium to its issue price of INR 75. Since its listing on Wednesday, the startup’s share prices have spiked 9.84% to end the week at INR 105.45.

It filed its draft red herring prospectus (DRHP) in January 2024. Its IPO comprised a fresh issue of 25,95,200 equity shares of INR 10 each. 

Founded in 2019 by Dushyant Gandotra, Menhood offers a wide range of products in the male grooming and lifestyle segment, such as trimmers, intimate perfumes, intimate wash and moisturisers.

The post New-Age Tech Stocks Rally In Budget Week, Paytm Emerges Biggest Gainer appeared first on Inc42 Media.

Investment activity across the Indian startup ecosystem redacted to an all year low in the budget week. Between July 22 and 27, startups managed to cumulatively raise a meagre $43.1 Mn via 12 deals, down 365% from $200 Mn raised across 25 deals in the preceding week. 

It is pertinent to note that seven of the deals materialised this week didn’t disclose the financial terms of their transactions. 

Funding Galore: Indian Startup Funding Of The Week [ July 22- July 27]

Key Startup Funding Highlights Of The Week

• Despite the plunge in overall funding aggregated, fintech emerged as an investor favourite in the week. The week’s top two fund rounds, Stable Money’s $14.7 Mn Series A round and NeoGrowth’s $11 Mn debt, took fintech to the top spot at a sectoral level.
• The week saw FAAD Capital backing four agritech startups with an infusion of over $121K. The firm’s investment turned agritech as the sector with the maximum number of deals and FAAD as the most active investor in the startup ecosystem.
• The week saw no seed funding deal materialise.

Other Major Developments Of The Week

• During the budget speech, finance minister Nirmala Sitharaman announced the setting up of an INR 1,000 Cr venture capital (VC) fund. She said that the government has increased its focus on the space economy and private sector-driven research and innovation at the commercial scale.
• Packaged food startup Wingreens Farms is eyeing the raise of $4.3 Mn debt from investors including S Gupta Family Investments, Saket Agarwal, Reena Singhal, Sanjeev Agarwal, among others
• In an exchange filing, beauty ecommerce major Nykaa said that it is looking to raise INR 125 Cr (about $15 Mn) via non-convertible debentures (NCDs) from an undisclosed foreign portfolio investor. Its board has approved and authorised the issuance of up to 12,500 NCDs at a face value of INR 1 Lakh each to raise the amount.
• Adtech unicorn InMobi-owned mobile content provider Glance is in advanced talks with existing investors, including Google, to raise $250 Mn. The talks are expected to materialise in the coming weeks.
• Former defence secretary Ajay Kumar led venture capitalist firm MountTech Growth Fund has marked the first close of its fund Kavach at INR 250 Cr (around $29.9 Mn). The VC is targeting a total corpus of INR 500 Cr for Kavach. 
• Electric mobility startup Kazam is raising $5 Mn in a funding round led by Licious and Vertex Ventures. It plans to use the capital to fuel its growth and expansion plans.
• PharmEasy-owned diagnostics platform Thyrocare Technologies is acquiring the Punjab-based pathology diagnostic business of Polo Labs to expand its presence in northern India.
• EV major Ola Electric is looking at a public listing as early as in the first fortnight of August. It plans to raise around $740 Mn via a combination of a fresh issue and an offer for sale.
• Captain Fresh is looking to acquire Poland-based food and beverage manufacturing company Koral to expand its footprint in the European market.

The post From Stable Money To Incuspaze – Indian Startups Raised $43 Mn This Week appeared first on Inc42 Media.

The government has informed the Parliament that the Open Network for Digital Commerce (ONDC) now has more than 5.7 Lakh sellers and service providers on the platform.

In a written reply to the Rajya Sabha, Minister of State (MoS) for Electronics and Information Technology Jitin Prasada said that ONDC has 71 seller applications, 22 buyer applications, and 16 logistics service providers and there are a total of over 5.7 Lakh sellers and service providers on the network. 

He added that ONDC does not track the number of consumers/buyers on the network. The network has witnessed rapid expansion, growing from over 1,000 transactions in January 2023 to more than 9.9 Mn transactions in June 2024.

Prasada added that ONDC is actively collaborating with various departments across all states and union territories, with each state/UT appointing a nodal officer to facilitate state-level engagements. 

To raise awareness about ONDC, 198 workshops have been conducted with different state departments. As a result, ONDC has signed Memorandums of Understanding (MoUs) with 11 states, onboarded 11 State Emporiums onto the network, and integrated 31 state entities and public sector undertakings (PSUs) into the network.

Launched in 2021, ONDC is an initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce & Industry. It aims to promote open networks for the exchange of goods and services over digital or electronic networks. ONDC is a Digital Public Infrastructure based on a network model, rather than an app or platform.

ONDC is an open-source platform designed to democratise ecommerce in India and bring small businesses online. As a private non-profit initiative supported by DPIIT, ONDC strives to make ecommerce more accessible across the country. Companies such as Delhivery, Paytm, PhonePe, Uber, IDFC Bank, Kotak, Shiprocket, Dunzo, and Tata Neu have integrated their services with ONDC.

The platform has been steadily expanding by adding new categories and broadening its services throughout India.

This development comes as ONDC seeks to integrate banks and fintech platforms, after initiating early pilots for credit disbursal through its network. The platform has partnered with Tata Group’s superapp Tata Neu and Paisabazaar for these pilots. The banks involved include HDFC Bank, IDFC First Bank, and Karnataka Bank, while fintech firms such as Fibe and others are also participating in the integration.

The post ONDC Crosses 5.7 Lakh Sellers And Service Providers On Its Platform: MoS IT appeared first on Inc42 Media.

Remember the pandemic era when the entire world’s population was forced into the confines of its homes? Well, the past be recalled, during that time governments around the world were battling more than just the dread of the Covid-19 virus, as cases related to depression, mental health and even death by suicides started falling out like skeletons from an old creaking closet.

Unfortunately, over a year after the WHO removed Covid-19 from its Public Health Emergency of International Concern (PHEIC) list, we have learnt little.

Now, what makes us say this is the sheer fact that we, as humans, have become too demanding to outgrow our desires, giving us despair in return. Consequently, we have received a list of health problems, all helmed by long and stressful working hours, pollution of all kinds, poor eating habits, and inactivity. 

This daily stress, which comes in all forms, has contributed to a rise in chronic illnesses such as diabetes, infertility, cardiovascular complications, and many other unexpected health problems, eventually taking a toll on our mental health. Imperative to mention that these issues explain not even 1% of the entire mental health crisis among Indians. 

According to a 2023 study published in Cureus Journal, the nation is “grappling with a high prevalence of mental health disorders, such as depression, anxiety and bipolar disorder, schizophrenia, and addiction to substances”. The situation becomes even more gruesome when one looks at the suicide rate in the country. Notably, a recent report from the National Crime Records Bureau (NCRB) records 1.71 Lakh deaths by suicide in the year 2022 alone.

Interestingly, healthtech startup Mave Health finds its genesis in the strong desire of its founder, Dhawal Jain, to address mental health issues in the country. 

“We incorporated Mave Health in January 2023 after I lost a close friend to depression. She was in therapy and taking antidepressants but to no avail,” cofounder Dhawal Jain told Inc42.

Jain, a BITS Pilani graduate, said that the episode took place in 2021 when he was running Dybo, a company that specialised in providing 3D and AR services to ecommerce platforms for a better shopping experience. 

With a heavy heart, a bereaved Jain began reading about mental health issues and its effects. While he was at it, he discovered a significant gap in this area, which was the lack of quick yet effective treatment for individuals facing depression.

Motivated by his entrepreneurial spirit, he partnered with Jai Sharma (a BITS-Pilani alumnus)  and Aman Kumar to combat despair and darkness in the lives of many. 

How Mave’s Tech Stack Tackles Depression

After initial R&D and examining global technical advancements in curing depression, the founders’ investigation led them to technologies designed to impact brain chemistry for the better. Their research led them to explore non-invasive brain stimulation (NIBS) techniques, particularly transcranial direct current simulation (tDCS). 

“We started researching avidly on depression, and that eventually became the reason for us to enter the mental health space,” Jain said.

They based the company’s flagship product, Arc, on an NIBS wearable device designed to treat depression. This tech works by applying weak electrical currents or magnetic fields to specific areas of the brain from outside the head.

These currents or fields can either increase or decrease the activity of brain cells in the targeted area. For example, to treat depression, NIBS helps in boosting activity in parts of the brain that are underactive. By changing brain activity in this way, NIBS improves symptoms of various mental health conditions or neurological disorders.

A specific type of NIBS, transcranial Direct Current Stimulation (tDCS), uses a weak electrical current passed through the brain via two electrodes on the scalp. For depression treatment, tDCS often targets the dorsolateral prefrontal cortex to enhance its typically low activity. 

“Depression mostly happens because there is too little activity in your prefrontal cortex. With stimulation, we’re able to reduce that barricade back to the normal level so that neurons can normally function,” Jain explained.

The current is very weak, similar to a 9-volt battery, and most people feel only a slight tingling sensation during treatment. By modulating brain activity, tDCS alleviates symptoms of conditions like depression. Mave’s Arc, a wearable device, does precisely this. 

As of now, the company imports the devices from a foreign based tDCS manufacturer. Since these devices are costly, the company imports them as per its requirements. 

Mave Health’s Days Of Incognito Mode

After tying up with the tDCS manufacturer, the company began operations in September 2023 in stealth mode. During this time, the startup began experimenting with the devices by partnering with numerous psychiatrists and health consultants, primarily in Bengaluru. 

While Jain thought that the startup would attract younger patients, he was surprised to see the adoption of the tech among the older generation. Another shocker for him came when even a farmer in an area neighbouring Bengaluru urged his tech’s intervention.

The startup founder said the team, in the pilot phase itself, was able to witness 88% improvement in their depression scores over 12 weeks, with 72% achieving remission (or overcoming depression). Furthermore, 65% of users reported enhancements in mood and cognitive function within the initial 21 days.

According to the cofounder, the tech has emerged as the answer to the traditional antidepressant medications, which often work by altering neurotransmitter levels in the brain and come with a range of side effects. 

How Does Mave Operate?

Currently, the startup operates on a cohort-based system, with new groups starting a 12-week programme each month. It charges one patient INR 20,000 per month for a three-month programme. This structure allows for close monitoring of progress and iterative improvements to the treatment protocol.

“We only onboard 25-30 people every month so that we can focus on everyone’s experience and provide an outcome. Ours is a hyper-personalised offering with a high touch model,” the cofounder elaborated. 

Upon enrolling, patients, whom the startup dubs ‘Mavericks’, receive the tDCS devices for the duration of the programme. The use of the devices is administered under expert guidance. Besides access to NIBS, the programme includes unlimited sessions with a range of experts, including doctors, psychologists, nutritionists, and fitness coaches. Psychiatric consultations are also part of the package, ensuring participants have access to personal medical care when needed.

So far, the company has only enrolled one batch of Mavericks. Moving forward, they plan on introducing new cohorts on a regular, monthly basis. 

What’s Ahead For Mave?

As of now, the company continues to import the tech from the oversees manufacturer. This acts as an inhibitor to its growth, as the import duties and the overall cost act as an impediment to its growth. 

To fuel its growth path, the startup raised a pre-seed funding round of INR 6 Cr from multiple investors in April. Some of Mave’s key investors include Zomato’s founder Deepinder Goyal, CRED’s Kunal Shah, and venture capitalist firms All In Capital and Bharat Founders Fund. 

With this backing, the startup is currently working on reducing its dependencies on offshore manufacturers. The company is in the process of developing its own wearable device, which is expected to launch by early next year. 

“The move towards in-house technology development is crucial for several reasons for Mave. It will allow us to customise the device to better suit Indians, potentially reduce costs, and navigate the complex regulatory landscape for health-related tech products in India,” he said, 

In terms of revenues, the company has yet to file a financial statement. However, giving a ballpark number, the cofounder said that they were currently doing somewhere around INR 5 Lakh to INR 6 Lakh a month from the Maverick cohorts. Meanwhile, Jain said that most of Mave’s customers either come through the organic content that his team creates on multiple platforms or through referrals. 

This allows the startup to minimise its advertising and promotion expenses. However, with the recent capital infusion, Jain will have enough headroom to bolster his digital advertising strategy. 

Besides, the company is also working to establish partnerships with psychologists, hospitals, and private clinics to expand its presence across India. 

 “The goal for FY25 is to hit $1 Mn in internal rate of return. Post this, we are planning to scale our revenues to $10 Mn in the upcoming fiscal. However, our focus isn’t only restricted to improving our finances. We’re more focussed on increasing the effectiveness of our treatment,” Jain said.

Currently, Jain, along with his team, seems to be on the right path, as he is looking to manufacture the tech in-house rather than depending on imported machines and tech. This will help the Mave cofounders to keep their tech costs at bay, all while bolstering other imperative divisions such as marketing and R&D. 

Besides this, the Mave founders have stepped into the mental health sector at a time when India has become a hotbed of depression cases, especially due to the challenges in the quality of life in the country. 

According to the National Mental Health Survey 2015-16, nearly 15% of Indian adults need active intervention for one or more mental health issues and one in 20 Indians suffers from depression. It is estimated that in 2012, India had over 2.5 Lakh+ suicides, with the age group of 15-49 years being most affected. It must be noted that the findings of the second phase of the National Mental Health Survey (NMHS-2) have yet to be made public.  

Overall, Mave Health operates in the Indian mental health market anticipated to grow at a CAGR of 1.08% to $1.19 Bn in 2028 from $1.14 Bn in 2024. 

[Edited by: Shishir Prasher]

The post How Mave Health Is Tackling India’s Mental Health Crisis With Its Wearable Tech appeared first on Inc42 Media.

Karnataka’s information technology and biotechnology (IT-BT) minister Priyank Kharge said that the state government has provided seed funding worth INR 264 Cr to 983 startups till date.

The minister made the remarks during the ELEVATE winners’ felicitation ceremony held on July 24 in Bengaluru. 

The ELEVATE scheme was launched by Karnataka’s department of electronics information technology biotechnology and science technology. Its goal is to provide support to entrepreneurs across the state who need early-stage funding to develop prototypes, strategise market entry, and scale up. 

The initiative is also backed by the department of social welfare and backward class welfare, and the Kalyana Karnataka Region Development Board. 

Of the total funding, the Karnataka government provided an aid of INR 60 Cr to 263 startups under its ELEVATE scheme in 2022 and 2023.

Of these, 47 startups were led by women entrepreneurs and 119 startups were based out of Tier I, II cities in the state.

The Karnataka government provided grants worth INR 4 Cr to 26 startups under its Amrita Startups 2022 (entrepreneurship and innovation by OBC entrepreneurs) scheme.

Meanwhile, funds worth INR 4 Cr were allocated to 19 startups under the ELEVATE Kalyana Karnataka 2022 (supporting entrepreneurship in North Karnataka) scheme.

Further, the government provided funding of INR 5.5 Cr to 17 startups under the ELEVATE Unnati (identifying and nurturing startups led by SC & ST entrepreneurs) programme, and INR 45.7 Cr to 201 startups under the ELEVATE 2023 scheme.

The startups which have benefited from the ELEVATE scheme are working on emerging technologies across sectors such as cleantech, smart city solutions, IT/ITES, healthcare, biotechnology, medtech and agritech.

Meanwhile, Kharge also said that the government is looking at startups to solve the various problems faced by the state.

“We will come up with summits for innovations, urban solutions, water, and the circular economy. The idea of these summits is to solve real-life problems. We will also conduct small challenges to address issues affecting the government and our people, which startups could help solve,” Kharge was quoted as saying by Moneycontrol.

Last month, Kharge said Karnataka is expected to attract investment of $6.2 Bn in technology sectors such as biotechnology, AI, semiconductors, AVGC (animation, visual effects, gaming, and comics), and healthtech from the US and Europe. 

Notably, Benglauru continues to be the top startup hub of India. In the first half of 2024, Benglaluru-based startups raised $1.57 Bn across 134 deals.

The post Karnataka’s Total Funding Support To Startups Stands At INR 264 Cr appeared first on Inc42 Media.

While the Indian startup ecosystem is plagued by the ongoing funding winter, investors continue to remain bullish about the ecosystem expanding further across the country. As per an Inc42 survey, investors expect Pune, Hyderabad and Chennai to emerge as the next startup hotspots in the world’s third-largest startup ecosystem.

The survey, which received responses from over 50 active venture capitalist firms and angel investors to gauge which cities can emerge as the next startup hubs of the country, saw investors being most optimistic about Pune, Hyderabad, Chennai, Jaipur and Ahmedabad, in that order. 

Within these startup hubs, Chennai-based startups raised the maximum amount of funds in the first half of 2024. Startups based in the Tamil Nadu capital raised $250 Mn in H1 2024.

Trailing closely was Pune, which saw investments to the tune of $241 Mn via 18 deals. Lending tech startup Fibe’s $90 Mn funding round and Rebel Foods’ $13 Mn debt round were among these 18 deals. 

Startups in Hyderabad netted over $210 Mn via 26 deals in the first half of 2024. Meanwhile, Ahmedabad-based startups managed to secure over $62 Mn, while Jaipur’s startups raised $47 Mn. 

Overall, each of these upcoming startup hubs raised more funding in H1 2024 than they raised in the entire 2023.

For context, Chennai-based startups raised $211 Mn in 2023. Pune-based startups also raised the same amount of capital, but Chennai led in terms of number of deals. Hyderabad startups secured $129 Mn in 27 deals last year. Further, Ahmedabad-based startups bagged $46 Mn in 2023, while Jaipur’s startup ecosystem saw a capital infusion of a mere $8 Mn.

It is pertinent to note that startup funding remained subdued in the first half of 2024. Indian startups raised $5.3 Bn in H1 2024, down 1.8% from $5.4 Bn in H1 2023.

Bengaluru continued to retain the title of India’s startup hub, with startups in the city raising $1.57 Bn via 134 deals in H1 2024. Mumbai trailed closely with net capital infusion of $1.49 Bn from 91 deals. 

A better understanding of Bengaluru’s dominance in the Indian startup ecosystem can be gauged when one looks at it from a historical lens. Since 2014, Bengaluru-based startups have accounted for about 50% of total startup funding. Startups in the city raised $70 Bn over the past decade. The city’s closest competitor Delhi NCR saw a net capital infusion of $44 Bn, while Mumbai-based startups secured $20 Bn in the same period. 

Meanwhile, the funding raised by the emerging startup hubs of Pune, Chennai, and Hyderabad stood at $5 Bn, $4 Bn, and $3 Bn, respectively, over the last decade. 

The post Pune, Hyderabad Lead The Race To Emerge As Next Startup Hubs Of India appeared first on Inc42 Media.

ONDC-connected marketplace Mystore has introduced an AI-powered semantic search feature on its buyer and seller apps to increase visibility of products.

Underpinned by Google Cloud’s GenAI platform Vertex AI, Mystore’s new feature aims to help sellers and buyers on the ONDC network by providing them with accurate query interpretation, tailored product recommendations to meet customers’ needs and quick search results to drive more traffic.

The integration of AI-based semantic search into the Mystore Seller App will help sellers improve their product visibility and sales on the ONDC Network.

By providing accurate and relevant product matches to buyers, Mystore’s new offering will further enhance the buying experience.

Commenting on the development, T Koshy, CEO of ONDC said, “Mystore’s … AI-powered semantic search on the ONDC Network … not only enhances the shopping experience but also levels the playing field for sellers of all sizes, enabling them to compete purely based on the relevance and quality of their products/services.”

“Google Cloud’s Vertex AI is enabling high quality searches for Mystore and ONDC enabling better discoverability and thereby enabling buyers and sellers to seamlessly connect on the platform,” said Bikram Singh Bedi, vice president and country MD at Google Cloud India.

Founded by Rajiv Kumar Aggarwal in 2022, Mystore offers ecommerce solutions to small and medium-sized enterprises (SMEs), direct-to-customer and (D2C) brands join the ONDC network and reach new customers pan-India.

With its buyer and seller app, Mystore enables seamless buying and selling via the ONDC network and also helps brands set up dealer-network-based quick commerce platforms.

Mystore CEO Aggarwal said that its AI-powered semantic search tool can increase ecommerce conversion rates by up to 25% and boost buyer engagement by providing highly relevant search results.

This comes a month after the Centre launched a new initiative to onboard 5 lakh micro and small businesses onto the ONDC platform. The MSME Trade Enablement and Marketing (TEAM) scheme aimed at facilitating this, was launched by Union Minister for Micro, Small & Medium Enterprises (MSMEs) Jitan Ram Manjhi with a budget of  INR 277 Cr for three years.

The post Mystore Rolls Out AI-Powered Semantic Search To Increase Product Visibility On ONDC appeared first on Inc42 Media.

A majority of new-age tech stocks were trading in green today (July 24), signalling buoyed investor sentiment, a day after startups got a shot in arm with the government scrapping angel tax in the Union Budget 2024-25. 

At least nineteen out of 24 new-age tech stocks under Inc42’s coverage jumped intraday on the BSE in the range of 0.98% to 7.1%, with Zaggle emerging as the biggest winner.

Shares of Zaggle opened today’s trading session at INR 306, up over 2% from the previous close. The stock jumped 7.1% intraday at INR 322.90 per share and was trading 5.32% higher at INR 315.80 apiece on the BSE at 1:28 PM.

CarTrade, Awfis, ixigo and Nazara were among other gainers.

Meanwhile, the remaining new-age tech stocks being tracked by Inc42 fell in the range of 1.13% to 2.78%, with MapmyIndia emerging as the biggest loser, with shares trading at INR 2,405.90 apiece on the BSE at 1:35 PM, down 2% from the previous close.

Paytm, RateGain and Mamaearth were among the other laggards during the day.

Data for shares of Yudiz was not available on the NSE at the time of publishing this article.

In her Budget speech, Union finance minister Nirmala Sitharaman made several announcements for the startup ecosystem, with one being that land records in urban areas will be digitised with GIS mapping.

The finance minister also announced a 46% increase in budgetary allocations for the tourism sector for the fiscal year 2024-25 (FY25), giving further push to travel  tech startups.

Moreover, the government has cut down TDS rates for ecommerce operators to 0.1% from 1% earlier.

The post New-Age Tech Stocks Rally A Day After Budget; Zaggle Biggest Winner appeared first on Inc42 Media.

While investor interest in the Indian startup ecosystem remained muted in the first half of the calendar year 2024, mergers and acquisitions (M&As) also saw a sharp slowdown. 

As per the ‘Indian Tech Startup Funding Report H1 2024’, the startup ecosystem saw just 37 M&A deals in the first half of the year. This was a 45% decline from 67 such deals in H1 2023 and a 34% decrease from 56 M&A deals in H2 2023.

In fact, H1 2024 saw the lowest number of M&A deals in a six-month period since Covid-hit H1 2020, when the number of deals stood at 35.

Talking about the M&A deals in H1 2024, listed gaming major Nazara Technologies was the most active in the startup ecosystem.

In a bid to expand its presence in the global entertainment landscape and diversify offerings, Nazara’s subsidiary NODWIN Gaming acquired Comic Con India in the first half of the year. While NODWIN acquired Publish.Me and Branded in 2023, the Nazara esports arm also took over Ninja Global and increased its stake in Freaks 4U Gaming to 100% during the period.

Besides NODWIN, Nazara’s subsidiary Absolute Sports acquired Pennsylvania-based entertainment news site Soap Central for $1.4 Mn in June. Nazara has continued its acquisition spree in the second half of the year as well. Last week, it acquired an additional stake in Paper Boats apps for INR 300 Cr to increase its ownership to 100%. 

In the gaming space, another major player OneVerse Gaming also made three acquisitions in the first half of 2024. Bolstered by the spree of acquisitions in the gaming space, media and entertainment led consolidation activities at a sectoral level. A total of nine M&As materialised in the sector during this period.

Enterprise tech and fintech trailed media and entertainment at a sectoral level with eight M&A deals each in the first half of 2024. The biggest acquisition in H1 2024 was SaaS giant Freshworks’ buyout of enterprise tech startup Device42 for $230 Mn. Another major acquisition that materialised in this period was the purchase of cloud kitchen Kitchens@ by existing investor Finnest. 

In terms of funding, Indian startups cumulatively raised investments worth $5.3 Bn in the first six months of the calendar year 2024, down 1.8% from $5.4 Bn in the year-ago period. 

However, investors expect funding to go up in the second half of the ongoing year. As per an Inc42 survey, ‘India’s Top Startup Investor Ranking H1 2024 Survey’, about 93% of over 50 startup investors see 2024 as a turnaround year for Indian startups. Investors believe that the funding trends are anticipated to pick up significantly due to the performance of the Indian public market moving forth. 

It remains to be seen if this potential increase in funding also translates into higher M&As in the Indian startup ecosystem.

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Manufacturing is at the top in the central government’s list of priorities, as evidenced by finance minister Nirmala Sitharaman’s Union Budget 2024-25 speech. 

A number of measures were announced — from a reduction in basic customs duty for inputs and raw material to incentives around job-creation — that should ideally further prop up the already-booming manufacturing industry.

The customs duty exemption will in particular reduce costs related to manufacturing mobile phones, lithium-based batteries for consumer electronics devices, electric vehicles (EVs), drones as well as the other focus areas such as space tech and semiconductors. 

Speaking with Inc42, 3one4 Capital’s Pranav Pai said that the government support to the homegrown manufacturing sector has addressed a significant barrier to growth. Hence, it eradicates reasons for investors who were hesitant about opportunities in India’s manufacturing ecosystem.

Stakeholders in the startup ecosystem believe that the manufacturing related enhancements will have a trickle down positive impact on the Indian startup ecosystem. 

“Given that this was a mid-term budget, we didn’t anticipate many sector-specific initiatives. Overall, it was a positive budget for local employers and manufacturers across industries. Therefore, there hasn’t been much investor concern caused by the budget. Investors will continue to maintain bullishness on industries like EV, consumer electronics, deep tech, logistics, among others,” Pai added. 

Cheer For Mobile OEMs

In a major boost to the growing smartphone market, the central government slashed the BCD for mobile phones, mobile printed circuit boards assembly (PCBA) and mobile chargers to 15% from the erstwhile 20%. 

Xiaomi India’s president Muralikrishnan B believes this will help further strengthen the domestic electronics manufacturing ecosystem. The popular notion is that this will encourage smartphone sales in the mid-premium and premium category. 

In the past, India Cellular And Electronics Association (ICEA), the apex industry body of mobile and electronics industry, had urged the government to reduce the number of import tariff slabs on mobile components as well as reduce import duties on the aforementioned mobile components.

While these demands have only been partially addressed, ICEA has welcomed the customs rebates.  

“The global nature of the electronics value chain necessitates such measures to enhance our manufacturing and export capabilities. These announcements will be a game changer, significantly boosting our industry’s competitiveness on the global stage,” ICEA’s chairman Pankaj Mohindroo said. 

Further, the tariff slab rationalisation was also acknowledged by the FM during the speech and will be taken up in the next six months. 

According to industry analysts, the BCD rebate will allow smartphone manufacturers to introduce price cuts across segments. Consultancy firm Techarc’s chief analyst Mohammad Faisal Ali Kawoosa told Inc42 that the development can potentially be the key to making the 5G smartphones more affordable.

How The EV Ecosystem Sees The Budget

Outside the smartphone and electronics manufacturing space, the budget’s announcements are expected to spur on EV production as well. Here too, the central government had turned to PLI to drive existing units to capacity, but the budget’s proposed incentives for new investments in manufacturing trend towards capacity addition. 

One of the key developments coming out of the budget was the quashing off of custom duties on the import of 25 key industrial minerals, including cobalt, lithium, copper, germanium, and silicon.

In particular, cobalt, lithium and copper are crucial in the manufacturing of batteries used in consumer electronics devices, EVs, drones, various energy storage systems and more.

Lithium, in fact, has been one of the most sought after minerals in the world. Similarly, cobalt is critical to develop high density batteries, whereas copper is used in electric motors, batteries, inverters, wiring and in charging stations. 

India has been in talks with multiple countries for partnerships for technical help on lithium processing, which when combined with a customs duty exemption will boost local manufacturing around lithium.

EV solutions provider Omega Seiki founder Uday Narang told Inc42 that 30% of the entire costs of producing an EV can be attributed to the battery itself. Hence, rolling back the import duties on critical materials like lithium, cobalt, and copper reduces the EV battery manufacturing costs substantially.

“While battery costs have been going down continuously in recent times, the roll back of the import duties on these critical elements will lead to a big boost in cost cutting. With this, we believe that we will cut down about 5-10% costs on battery manufacturing moving forward,” he said. 

Similarly, commercial EV maker EVage Motors’ founder and CEO Inderveer Singh said that battery production costs will fall by 7.5%-12% in the case of the company. Besides battery production, the startup recently entered into a joint venture with UK-based electric drivetrain systems manufacturer DG Innovate (DGI) to set up an electric motor manufacturing plant. Singh believes the duties rebate will lead to a 4% reduction in procurement costs for this plant.

Manufacturing Impacts Key Sectors

And while the Union Budget did not specifically mention how the central government is looking to boost manufacturing in other key sectors — space tech, defence and semiconductors, for instance — we expect the overall push in manufacturing to have a trickle down effect on all these key sectors. 

For instance, the rebate on customs duty for import of minerals and raw material is also slated to act as a boost for startups in sectors such as spacetech, defence and drone tech, where specialised minerals and metals are needed to create the products. 

And not unlike the case for the EV ecosystem, the exemption of customs duty on lithium, a crucial mineral used in the aforementioned sectors, will reduce costs, making lithium-based technologies more affordable. 

Besides this, the change in mobile PCBA customs duty and allied increase in customs duty on import of PCBA for telecom is also likely to spur the manufacture of 5G equipment in India. 

In addition to the roll back of customs duties on the aforementioned minerals, the centre has also slashed custom duties on gold, silver and platinum. This will directly benefit entities in the semiconductors and electronics manufacturing space, which leverage these precious metals for manufacturing components. 

Interestingly, the budget speech did not announce any particular government investments in the semiconductor manufacturing space, preferring to focus on incentives that cover the entire gamut of manufacturing. In the past year, the government set aside INR 1K Cr to fund semiconductor design startups, along with a $10 Bn allocation for semiconductor manufacturing research and design.

The post Budget 2024-25: Decoding The Big Manufacturing Push appeared first on Inc42 Media.

Research and development (R&D) grabbed the spotlight as finance minister (FM) Nirmala Sitharaman presented the Union Budget 2024-25. The FM announced a slew of sops to spur research and innovation in the private sector.

Putting the R&D push in full throttle, Sitharaman said that the government will operationalise the INR 1 Lakh Cr Anusandhan National Research Fund in this fiscal. The fund, as per the FM, will look to incentivise basic research and prototype development in the country. 

Announced during the interim Budget in February, the fund will offer interest-free loans for a tenure of 50-years to finance long-term research and innovation in sunrise domains. 

In her seventh consecutive Budget speech, Sitharaman said that the government will set up a mechanism to fuel private sector-driven research and innovation at commercial scale with the financing pool of the Anusandhan Fund. 

On top of that, she announced an INR 1,000 Cr venture capital (VC) fund that will invest in homegrown spacetech startups. 

The FM also said that the government will provide funding in “challenge mode” to R&D-focussed agritech startups to shore up the nation’s agriculture sector. 

“Our government will undertake a comprehensive review of the agriculture research setup to bring the focus on raising productivity and developing climate resilient varieties. Funding will be provided in challenge mode, including to the private sector. Domain experts both from the government and outside will oversee the conduct of such research,” added Sitharaman. 

The announcements were welcomed by the country’s startup ecosystem, which lauded the government’s focus on building a more research-oriented and innovation-driven product economy. 

R&D Push Gets A Big Thumbs Up

Speaking with Inc42, Manoj Agarwal, managing partner at deeptech VC firm Seafund, said, “As a deeptech-focussed VC fund, (we think) FM announcing INR 1,000 Cr space economy VC fund and R&D fund of INR 1 Lakh Cr will work as a strong catalyst for startups in deeptech and spacetech.” 

Echoing similar sentiment, Hyderabad-based incubator T-Hub’s CEO Mahankali Srinivas Rao said, “This fund (INR 1 Lakh Cr) will power basic research and prototype development, driving commercial-scale innovation and enabling startups to bring cutting-edge solutions to the market.”

However, healthtech startup NeuroEquilibrium’s founder Rajneesh Bhandari said it is essential to ensure that these funds are easily accessible to startups and not “bogged down” by bureaucratic hurdles. 

Deepak Gupta, general partner at WEH Ventures, told Inc42 that the R&D spending in the country has not grown commensurately with GDP growth. As such, the INR 1 Lakh Cr fund has the potential to spur the local innovation ecosystem. 

For context, as per government data, India more than doubled R&D spending to INR 1.27 Lakh Cr in 2021 compared to INR 60,000 Cr in 2011. However, the picture becomes bleak in terms of percentage, as spending on R&D fell from 0.76% of the GDP to 0.64% in 2021. 

Seafund’s Agarwal believes that the R&D-focused announcements in the Budget can push the country in the direction of a product-led economy. 

However, an investor, who didn’t want to be named, said while the Budget announcements are in the right direction, the goal of a product-led economy is still a long way off.

“The Budget does not solve this issue (low R&D spend) entirely… We need the best quality professors and equipment to build a research-led academia. While many of the professors and candidates are doing that in India at many universities, it will take a few years for that effect to trickle down and lead the country on the path of building world-class products,” said the investor. 

Centre Banking On Trickle-Down Effect

Industry players believe that the FM, with the announcements, is looking to foster a larger innovation ecosystem where many can benefit in a symbiotic manner. 

Warehouse automation startup Control One AI’s founder and CEO Pranav S believes that the R&D fund will also be impactful for the AI sector and will open up new avenues for accessing cutting-edge technologies.

Another industry founder said that both the “patient capital” as well as the spacetech funds will help startups across various domains explore synergies and leverage aspects such as talent and IP creation and build state-of-the-art local facilities. 

However, issues remain. The FM said that the INR 1 Lakh Cr R&D fund will also be utilised for spurring research in the nuclear energy sector to set up Bharat Small Reactors and develop Bharat Small Modular Reactor as well as newer technologies for nuclear energy. 

The nuclear sector is capex heavy and grapples with challenges such as scalability and commercialisation. Additionally, there are quite a few homegrown startups in the nuclear energy space, like HYLENR and Avasarala Technologies. As such, there are some concerns that the nuclear energy sector may end up utilising a large chunk of the fund. 

However, it is pertinent to mention there is no clarity yet on how the R&D fund will be utilised. Most stakeholders from the startup ecosystem expect it to be deployed in a Fund of Funds (FoF) fashion to reach the desired applicants. 

While the Centre has taken a major step towards pushing R&D, the onus is now on the startup ecosystem to leverage this pitch and turn the country into a product-led nation.

The post Budget 2024: Can The R&D Push Transform India Into A Product-Led Economy? appeared first on Inc42 Media.

While the abolition of angel tax has come as a big relief for the world’s third-largest startup ecosystem, Mohandas Pai, the former CFO of Infosys and partner at Aarin Capital, now wants all the pending cases under the annulled tax regime quashed.

Speaking with Inc42, after the budget announcement, Pai said, “It is a big relief for the startups. The government should have done it earlier instead of harassing people. The government must now withdraw all cases pending under angel tax in the last five years and state clearly that no angel tax will be levied on any pending assessments.”

“All the people stuck in the angel tax web should be relieved,” Pai reiterated.

We must note that during her budget speech on July 23 (Tuesday), finance minister Nirmala Sitharaman announced the abolishment of the angel tax, a much-criticised taxation regime among Indian startups and investors.

Following the announcement, social media platforms were flooded with reactions from investors, the VC ecosystem, founders, and tax lawyers – all breathing a sigh of relief.

“The life of an entrepreneur is defined by time and a constant battle against insuperable odds. Angel Tax best exemplified this statement as it was an albatross across the neck of all Indian entrepreneurs for 12 years,” as per Siddarth Pai, the founding partner at 3one4 Capital.

However, the pending cases continue to be a concern, he also stated.

What About Pending Cases Under Angel Tax?

In October last year, Inc42 reported that 10,809 DPIIT-recognised startups applied for the angel tax exemption between February 19, 2019, and September 26, 2023. Of these startups, only 8,066 were granted exemption.

In contrast, only 944 startups had applied for angel tax exemption as of June 21, 2019, out of which the CBDT exempted 702 startups under this provision.

Hence, it goes without saying that there are hoards of cases still pending under angel tax.

As 3one4 Capital’s Siddarth Pai said, “The section will no longer be operational from April 1, 2024 (once the Finance Bill gets passed). This means that all startups which have raised capital at a premium [since the starting of this fiscal] shall not be subject to this Angel tax from April 1, 2024 onwards (April 1, 2025 mentioned in the Finance Bill is for the relevant assessment year, not the year it goes live).”

However, he added that the ones that raised capital in previous years may still receive a notice. 

“The FM must announce that startups in the past will not face Angel Tax notices and those which have received notices should see them withdrawn,” Pai said.

Echoing his sentiment, Sandiip Bhammer, founder and co-managing partner at Green Frontier Capital told Inc42 that the issue of pending cases under angel tax is a “looming concern” for startups and investors. 

“The government should take steps to establish clear guidelines and transparency, establish a fast-track resolution mechanism and engage with stakeholders for practical and implementable solutions,” Bhammer added.

Can The Government Lift Pending Legal Cases?

“While the government cannot drop the earlier cases as the law has existed so far, one remedial path the government can take is to give instructions or issue administrative circular to be less stringent on the pending cases or respect their valuation reports,” a legal expert told Inc42, requesting anonymity.

Meanwhile, Rajarshi Dasgupta, executive director, tax, at AQUILAW, also said that the pending cases under the angel tax will continue as it is, unless otherwise falling under amnesty.

On the other hand, Anirudh A. Damani, founding partner at Artha Venture Fund, suggested that one approach could be introducing a scheme similar to the Vivad Se Vishwas initiative to resolve tax disputes amicably. 

“Such a scheme could help withdraw these cases, provided the investments are verified as genuine,” he said, adding that the valuation paid during these investments mustn’t be subject to scrutiny by tax assessors, as the focus should be on supporting and fostering the startup ecosystem rather than penalising it,” Damani added.

What Is The Discussion All About?

For a quick recap, initially, the idea behind introducing angel tax was to keep shell companies at bay and prevent laundering of black money.

Though there were certain amendments introduced over the period as the government faced pressure from the startup ecosystem, it continued to remain a hurdle for investors and companies following fair business practices, as noted by industry leaders.

Though a major concern remains around the pending legal cases under angel tax, a major hurdle is gone nonetheless with its abolition. 

As Bhammer noted: earlier, the tax was imposed on startups raising capital at a premium in excess of their fair market values as the excess value was treated as income. Since most startups did not earn a profit for some time after the commencement of their businesses, it became difficult to justify the premium as the fair market values were always low. 

As a result, there were frequent disputes between the startups and tax authorities in connection with the fair market value of shares, which led to costly and lengthy litigation and put off international investors from investing in India’s startup companies, said Bhammer.

With angel tax now abolished, startups will be able to raise funds more easily without the fear of any tax liabilities. 

“International funds can now invest in companies based on market-driven competitive valuations without the risk of any tax scrutiny and potential disputes with the Indian tax authorities,” he added.

The post Angel Tax Is Dead But Pending Cases Must Be Quashed: Mohandas Pai appeared first on Inc42 Media.

Finance minister Nirmala Sitharaman only mentioned the word ‘startup’ twice in her entire Union Budget 2024-25 address, but the budget itself had plenty in it for the evolving startup ecosystem, including companies in the manufacturing and MSME spaces.

Indeed, this year’s budget address signalled that the government is looking at startups as part of the corporate world at large, given many of the broader measures and the budgetary allocation for large sectors and industries.

The biggest announcement for startups was related to the abolishment of the contentious Angel Tax for investors in all classes, which would be a big relief for startups, but pending Angel Tax investigations are still a sore point for many startups.

In terms of sector-specific allocation, India’s spacetech startups are under the spotlight once again in the Union Budget 2024, but besides this, the biggest push has come for the manufacturing industry.

Additionally, the Union Budget 2024-25 showed that the government is looking at uplifting the MSME sector and startups in a big way by expanding the various credit access platforms available to this class of businesses.

For individuals, though, not much relief was found from the current tax regime in the Union Budget 2024. While some adjustments were made to the income tax structure, the bigger focus has been on increasing the tax collection by targetting the growth seen in securities and derivatives trading.

Sitharaman also spoke about the government’s focus on digital public infrastructure (DPI) for modernising agriculture, healthcare, finance, ecommerce, education, law and justice, logistics and other key areas. These are undoubtedly areas that Indian startups can target.

For instance, land records in urban areas are set to be digitised with geo information systems (GIS) mapping, while sector-specific databases will be created under the Digital India mission to improve data governance, collection and processing.

Here are the five key areas that were under the spotlight during Sitharaman’s 90-minute Union Budget 2024-25 address:

Huge Focus On Skilling, Employment 

• One-month wage to all persons newly entering the workforce in all formal sectors
• Incentive boosts for employers and new employees in the manufacturing and other sectors
• 1,000 Industrial Training Institutes will be upgraded around skill-focussed outcomes
• Loans for upskilling and higher education in domestic institutions

As expected in the run-up to the Union Budget 2024, Sitharaman focussed heavily on encouraging new employment and job creation in key sectors.

Job-creation measures included the new internship scheme, EPFO-based benefits for employees and employers as well as a focus on skill development through the Industrial Training Institutes.

In addition to the PLI schemes that have catapulted India in the global supply chain market, the government is looking to encourage investments in large-scale manufacturing and formal sectors by rewarding employers for hiring new workers.

Those in the manufacturing sector, in particular, stand to benefit as the pace of new job creation is higher in this sector as compared to the services industry. We can see these incentives driving investments in new manufacturing units for semiconductors, automotive and EV industry, while the already booming electronics manufacturing industry is likely to expand its base in India — especially when you read these changes along with the lower customs duty on many critical raw materials and inputs (more on this later).

Interestingly, the budget speech did not announce any particular government investments in the semiconductor manufacturing space, preferring to focus on incentives that cover the entire gamut of manufacturing. In the past year, the government set aside INR 1K Cr to fund semiconductor design startups, along with a $10 Bn allocation for semiconductor manufacturing research and design.

Budget 2024 Brings Mixed Bag For Taxes

• Contentious Angel Tax For Startups Abolished From April 1, 2024
• 2% Equalisation Levy AKA Digital Tax On Foreign Cos Abolished From August 2024
• Short-Term Capital Gains Tax Hiked To 12.5% From 10%
• Long-Term Capital Gains Tax Hiked To 20% From 15%

When it comes to tax-related changes, Sitharaman’s budget dished out the good news with an equal measure of the bad.

Firstly, most startups will welcome the abolishment of Angel Tax, which has been a thorn in the side of early-stage startups for the past six years when the IT department began looking at potential violations and sending notices to companies and their investors.

Ever since it was introduced in 2012, the Angel Tax clause was used to harass startups whichraised capital from investors, often at a premium based on valuation reports. The tax was levied on the difference between issue price of unlisted shares and their fair market value.

The government has now abolished the contentious Section 56(2)(viib) from April 1, 2024, but several cases are still pending with authorities as we reported a few days ago. These are unlikely to be cast away without a resolution, so startups could still see some residual pain from angel tax for the time being.

In conversations with Inc42, many investors have suggested that the government needs to wipe the slate clean when it comes to these pending probes.

Equalisation Levy Removed, TDS On Ecommerce Slashed

Next, Sitharaman threw a surprise when she abolished the 2% equalisation levy often called the digital tax on foreign tech and ecommerce companies operating from India. This tax was meant to offset the loss of revenue for India from foreign companies selling services or products in India.

The change in the equalisation levy is expected to provide a lot of cheer for US-based companies, which have long asked for this tax to be removed. The change will reduce the cost of some online and digital services, such as global companies advertising in India through digital ad networks, which have to pay a 2% premium to the service provider in many cases.

For ecommerce operators in India, the government has proposed a lower tax deducted at source (TDS) rate, slashing it significantly from 1% to 0.1%. This is likely to spur on digital commerce adoption as it reduces the cost of online selling in a big way. The TDS was introduced as a way to monitor ecommerce transactions for round-tripping of funds and to prevent money laundering. Lowering this will allow the government to continue monitoring transactions for those red flags, while operators will have to incur lower upfront costs to facilitate transactions.

Concerns Over Capital Gains Tax Hikes

Finally, in what is expected to raise a lot of concerns among individual and institutional investors, the finance minister hiked the tax rate on short term and long term capital gains, as well as the securities transaction tax (STT) applied for derivatives (futures and options). From October 1, 2024 — subject to the passing of the Finance Bill — the STT on options up from 0.062% to 0.1%. STT on futures goes up from 0.0125% to 0.02%.

According to Zerodha CEO and cofounder Nithin Kamath, this would result in 66% higher STT collection from users based on 2023 volumes. The volumes themselves have grown significantly —  monthly futures and options turnover reached a record $1.1 Tn in March 2024 from approximately $27 Bn in March 2019.

These higher taxes, coupled with higher STCG and LTCG taxes, are likely to cool down some of the F&O frenzy in the derivatives market, particularly for traders with low volumes.  If the idea was to cool down the activity in the markets, this might just do the trick,” Zerodha’s Kamath said in a post on X.

Budget 2024 Boost For Spacetech Startups

• INR 1,000 Cr government-backed venture fund for space economy

Following the privatisation of the space sector in 2020, and after introducing 100% foreign direct investments (FDI) for spacetech in February this year, Sitharaman brought in more good news for the space economy.

While the contours of the dedicated space economy fund will become clearer in the next few months, we know that the focus has been on indigenous manufacturing and creating application testbeds for spacetech startups.

While the FDI route is essential for scaled-up startups and for growth funding, the government-backed fund is likely to be a big boost for startups in seed and pre-seed stage.

Besides this, exempting and lowering customs duty on minerals such as lithium, copper, cobalt and rare earth elements is seen as a critical boost for sectors such as nuclear and renewable energy as well as space, defence and telecommunications, which have overlaps in terms of the component value chain.

Fuelling Manufacturing Growth

• Customs duty on mobile phones, mobile printed circuit board assembly (PCBA) and chargers reduced to 15%
• Ecommerce exports hub to be set up for MSMEs in manufacturing space
• Customs duties on 25 critical minerals, oxygen-free copper and parts for manufacturing of connectors
• 50% increase in customs duty on importing PCBs for telecom equipment

As expected, Sitharaman’s Union Budget 2024-25 ushered in the next phase of the central government’s major focus on manufacturing.

A host of raw materials and inputs have seen a reduction in basic customs duty (BCD), which is expected to drive domestic manufacturing and is seen as a hope of reducing the cost of finished goods. These savings are likely to be passed on to consumers in key areas such as smartphones and mobile devices, EV and smartphone batteries, and finished goods that are dependent on refining minerals and chemicals.

“A comprehensive review of the customs duty rate structure will also be carried out over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes,” Sitharaman said in her budget speech.

While manufacturing costs are expected to go down, the changes are also likely to reduce disputes with the customs and imports authorities over raw materials. The customs duty exemptions are for 25 critical minerals, including cobalt, lithium, copper, germanium, and silicon, many of which are vital for electronics and battery manufacturing.

In addition, the relief through reduced customs duties on gold and silver (6% vs 15% previously) and platinum (6.4% from 15.5 %) will give a fillip to gems and jewellery industry as well as other sectors that leverage precious metals for manufacturing components, such as semiconductors and electronics manufacturing.

Credit Push For MSMEs

• Credit guarantee scheme for purchase of machinery and equipment without collateral
• Public sector banks will build their in-house capability to assess MSMEs for credit
• The limit of Mudra loans doubled to INR 20 Lakh for entrepreneurs
• Expanding TReDS trade invoicing platform to boost MSME working capital
• New SIDBI branches to serve major MSME clusters

The lower BCD on input and raw material will be critical to fuel large-scale manufacturing in electronics, space, clean energy, and other emerging industries. What did the Budget 2024-25 have in store for smaller businesses that are also looking to build India’s manufacturing capacity.

Firstly, the government plans to establish ecommerce export hubs in a public-private partnership (PPP) model to empower MSMEs and traditional artisans to sell their products in international markets.

These hubs will operate under a seamless regulatory and logistic framework, offering a comprehensive range of trade and export-related services under one roof, significantly enhancing the ease of doing business for small and medium enterprises (SMEs).

The ecommerce export hubs will be backed by over 100 food quality and safety testing labs certified by the National Accreditation Board for Testing and Calibration Laboratories (NABL), which are likely a measure to boost MSME food exports.

Further, the limit of loans provided under the Pradhan Mantri MUDRA Yojana (PMMY) will be increased to INR 20 Lakh from the existing INR 10 Lakh. The loan limit will be increased for entrepreneurs who had applied, availed and repaid MUDRA loans under the TARUN category previously.

Expanding MSME Credit Guarantees

Sitharaman also announced a credit guarantee scheme for MSMEs in the manufacturing sector. The government has provided MSMEs in the manufacturing sector with a guarantee cover of up to INR 100 Cr. “The scheme will operate on pooling of credit risks of such MSMEs, a separately constituted self-financing guarantee fund will provide to each applicant guarantee cover up to INR 100 Cr, while the loan amount may be larger,” the finance minister said.

The FM added that national banks will be tasked with creating credit assessment models for MSMEs based on a digital footprint score, instead of relying on external assessment, which rely on asset and turnover criteria.

The credit guarantee programmes should ideally allow MSMEs to secure loans from registered entities without providing collateral or a third-party guarantee. Additionally, term loans will be made available to facilitate the purchase of machinery, further supporting the growth and operational efficiency of micro, small and medium enterprises.

The post [Key Takeaways] Decoding The Budget For Startups: Mixed Bag For Taxes; Big Boost For Manufacturing appeared first on Inc42 Media.

New-age tech stocks showed mixed reactions to the Union Budget 2024-25, with the travel tech segment emerging as a clear gainer at the end of Tuesday’s trading session on the back of incentives announced to boost the domestic tourism industry.

Twelve out of the 24 new-age tech stocks under Inc42’s coverage gained in a range of 0.5% to 8.4%, while the remaining 12 fell in a range of 0.15% to 3.86%. 

Domestic benchmark indices too fell. While BSE Sensex closed 0.09% lower at 80,429.04, Nifty 50 fell 0.12% to 24,479.05.

MapmyIndia was the biggest gainer among the new-age tech stocks, surging 8.55% to close the session at INR 2455.50 apiece on the BSE after finance minister Nirmala Sitharaman announced that land records in urban areas will be digitised with GIS mapping.

In the travel tech segment, EaseMyTrip, RateGain and Yatra zoomed 5.42%, 3.54% and 3.17%, respectively. These stocks got a shot in the arm after the finance minister announced a 46% increase in budgetary allocations for the tourism sector for the fiscal year 2024-25 (FY25).

Tracxn, CarTrade, IndiaMART InterMESH, Nykaa and Paytm were among the other gainers.

Meanwhile, Yudiz emerged as the biggest laggard, with shares of the IT development startup declining more than 3.8% to end the trading session at INR 60.95 apiece on the NSE.

Zomato, ideaForge, Fino Payments Bank, PB Fintech also saw a drop in their share prices today.

The finance minister made a number of announcements for the startup ecosystem, with the biggest one being the abolition of the infamous angel tax.

The post Budget 2024-25: New-Age Tech Stocks See Mixed Performance, Travel Tech Stocks Gain appeared first on Inc42 Media.

The life of an entrepreneur is defined by time and a constant battle against insuperable odds. Angel Tax best exemplified this statement as it was an albatross across the neck of all Indian entrepreneurs for 12 years.

Introduced in 2012 by Shri Pranab Mukherjee under a series of measures titled “to prevent the generation and circulation of unaccounted funds”, Section 56(2)(viib) taxes the difference between issue price of unlisted shares and their fair market value as income in the hands of the company. Converting capital receipts to income and taxing it is a uniquely Indian innovation.

Over time, this section was used to harass startups who raised capital from investors. Such startups often do so at a premium and obtain a valuation report to justify the issue price. However, the tax department would compare the projections against the actual performance of the startup and tax the difference. Thus, an anti-abuse measure became a tax harvesting section.

These notices have resulted in companies shutting down due to the notices, being unable to raise funds from investors and even entrepreneurs leaving the country to startup overseas.

But at last, this tax has been removed.

The section will no longer be operational from April 1, 2024 (once the Finance Bill gets passed). This means that all startups who raise capital at a premium shall not be subject to this Angel tax from April 1, 2024 onwards (April 1, 2025 mentioned in the Finance Bill is for the relevant assessment year, not the year it goes live).

However, those who have raised capital in previous years may still receive a notice. The honourable Finance Minister must announce that startups in the past will not face Angel Tax notices and those who have gotten notices should see them withdrawn.

For years, this Angel tax section saw numerous changes, modifications, carveouts and exclusions. Those failed to create actual impact on the ground as the conditions were onerous, resulting in many startups giving up the exemptions. The extension of Angel tax to foreign investors in 2022 resulted in any investors choosing to pause on investing in India.

The fact that Angel tax was removed without any conditions is a huge boost for Startup India and investors.

After 12 years, the battle is finally won. Angel Tax is dead.

The post Elegy On Angel Tax appeared first on Inc42 Media.

Finance minister Nirmala Sitharaman on Tuesday (July 23) said that long-term capital gains (LTCG) on all financial and non-financial assets will now be taxed at 12.5%.

Essentially, the FM has hiked the LTCG tax rates as capital gains are currently taxed at 10%. 

In her Budget 2024-25 speech, the FM also said that the limit of exemption for capital gains will be set at INR 1.25 Lakh per year. Additionally, listed financial assets held for more than a year will now also be classified as long-term assets, said the minister. 

Meanwhile, Sitharaman also said that short-term gains on some financial assets will now attract a 20% rate instead of 15%, while those on all other assets will continue to attract the applicable tax rate.

“For benefiting lower and middle income classes, I propose to increase the limit of exemption on some financial instruments for capital gains to INR 1.25 Lakh a year… Unlisted bonds and debentures, debt mutual funds and market-linked debentures, will attract tax on capital gains irrespective of holding period,” Sitharaman added. 

The development is expected to have a direct bearing on startups as money made on the sale of unlisted equity shares after a holding period of two years is considered LTCG. 

“This (LTCG) rate earlier was 10% for STT paid listed equity shares and units of equity-oriented funds… and, for other assets, it was 20% with indexation. For bonds and debentures, (the) rate for taxation of long-term capital gains was 20% without indexation. For listed bonds and debentures, the rate shall be reduced to 12.5%. Unlisted debentures and unlisted bonds are of the nature of debt instruments and therefore any capital gains on them should be taxed at applicable rate, whether short-term or long-term,” explained a Budget document. 

The hike is expected to weigh heavily on startup employees and saddle them with additional costs associated with owning and executing stock options. 

Meanwhile, the Budget also saw FM Sitharaman announce a host of new sops for the Indian startup ecosystem, including the abolition of the angel tax and an INR 1,000 Cr venture capital fund for the space economy. 

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