A compilation of important news from the startup world:
Private equity inflows in India: Venture capitalist investment in start-ups slows
Confirming the growing trend of slowing fund infusion by venture capitalists in internet-based start-up firms, a new report by CB Insights and KPMG International shows that both the volume of investment and value of deals in India fell during the April-June quarter of the current calendar year compared to the January-March period, reports The Financial Express. In fact, on both fronts, there is a slowing trend since the third quarter of calendar 2015, reports fe Bureau in New Delhi. While the value of the deals fell 58% during the April period compared to the preceding quarter, volume-wise there was a 12% decline during the same period. According to a report, the slowing down of investments in such firms has earlier been highlighted by Traxcn Technologies also, which shows that money isn’t moving into start-ups as freely as it was last year. For instance, Traxcn data shows that just $899 million was invested between January-May this year, which is far less than $1.6 invested during the same period last year.
Eyeing reinvention, India’s traditional businesses bond with startups
When billionaire investor and e-commerce sceptic Rakesh Jhunjhunwala committed to become the biggest investor in Exfinity Fund that backs business-to-business technology ventures, last November, he only did what bricks-and-mortar industrialists have been doing for a while–putting their money into the country’s burgeoning consumer internet and tech startups, trusting them to strike it big. It is also their way to hedge against the disruptive power of online businesses. What brought Jhunjhunwala on board Exfinity was the depth of its team. After a 45-minute meeting with former Infosys board members TV Mohandas Pai and V Balakrishnan, the 56-year-old ‘Indian Warren Buffet’ agreed to add tech firms to his $1 billion (Rs 6,653 crore) portfolio. Pai, who has backed Exfinity Fund and co-founded Aarin Capital, said promoters of large businesses are slowly getting over their reservations about the technology industry.
Govt launches incubation cell to support export startups
In line with the government’s policy of encouraging entrepreneurial spirit among the youth, the Union Minister of MSME Kalraj Mishra today inaugurated the Incubation Cell at the Indian Institute of Foreign Trade (IIFT) designed to provide export start-ups with necessary hand holding support for expanding their existing domestic business into foreign markets, according to a report in Fibre2fashion.com. Called “KITTES (Knowledge for Innovation in Trade & Technology for Entrepreneurial Start-ups), the incubation cell is an initiative dedicated to startups in the domain of international business. Run by the Centre of MSME Studies at IIFT (Delhi), the aim of KITTES is to provide guidance and technical support for MSME start-ups right from ideation stage to their internationalization towards taking a final leap into foreign markets, an official release said.
Unicorns becoming a rarer breed as VC investments in Indian startups plunge
Venture capital (VC) investment in India plummeted 58 per cent in the June quarter over the previous three-month period, according to a report by KPMG and CB Insights released on Tuesday, mirroring increasing investor caution towards funding start-ups. VC firms ploughed $583 million into India in April-June, down from $1.4 billion in January-March, said a report in TechCircle,in. VC investments in India have been on a decline since October-December. Investments in the December quarter halved to $1.5 billion from $2.9 billion in July-September. Investors have turned cautious towards putting money in start-ups and are questioning their business models and valuations. Apart from demanding that start-ups slow expansion, slash costs and cut discounts, many VCs are setting performance milestones; some investors are only releasing funds in instalments, Mint reported in January.
NowFloats acquires chat-based app Lookup
yderabad-based NowFloats Technologies Pvt. Ltd—which runs NowFloats, a platform enabling local businesses to target customers based on location—has acquired Bangalore-based chat-based app Lookup in a cash and stock deal, the company said in a statement. NowFloats acquired Lookup’s technology team and product which will help it add over 90,000 customers to over 250,000 businesses currently accessing its platform, reports . In addition, NowFloats will get access to Lookup’s over 1.2 million registered users in Bengaluru, Mumbai, Delhi and Pune. “We wanted to invest in a conversational interface as we always believed that for certain categories (where the user needs more information before making the purchase decision) having a simple way to interact with the merchant is very important. We aim to build Lookup further as a direct consumer channel to simplify discovery of offline businesses beyond the existing search engines and social networks,” said Ronak Kumar Samantray, co-founder, NowFloats.
Almost 75% of startups globally will fail: Kris Gopalakrishnan
Infosys Co-Founder and former CII President Kris Gopalakrishnan Tuesday said almost seventy percent of startups globally will fail and only five to ten percent will become large and scale up. “Almost seventy percent of startups will fail. About 20 percent will survive but will not grow. They will remain small enterprises, and may be only five to ten percent will become large and scale up – that is the spastics globally,” he told reporters at the announcement of the 12th Innovation Summit 2016 here, of which he is the chairman.
An Open Letter To The New RBI Governor From Fintech Startups
The RBI has been a great champion for fintech startups. The support of the RBI in terms of guidance and on a policy level has allowed fintech companies to flourish in an otherwise regulated and monitored financial environment in India. A few massive reforms undertaken by the RBI began the revolution in payment systems in India. The RBI played a key role as the catalyst in the landmark work done by the National Payments Corporation of India (NPCI). This included setting in motion various payment systems and newer technologies like Immediate Payment System (IMPS), Bharat Bill Payment System (BBPS), Aadhaar-based E-KYC, RuPay cards and the Unified Payment Interface (UPI).