A compilation of important news from the startup world:
- Ford and Sequoia plant $25 million into Indian rental startup Zoomcar
Over the weekend, it was reported that India-based Zoomcar is on the verge of closing a $25 million Series C round that Ford will lead with a $15 million investment. This more than doubles their finances, having raised just over $21 million in previous rounds. Besides Ford Smart Mobility, the round’s investors include Sequoia Capital and Reliance Venture Management, according to Business Insider. They also write that this is Ford’s first major investment in the country. The company is on pace for $25 million in revenues this year, which brings it close to profitability: Zoomcar calls itself “EBIDTA-level profitable in several cities,” meaning in those cities its operations would be profitable if not for taxes, interest and depreciation. The startup operates over 1,600 cars, claiming more than 2,100 rides a day and over 860,000 users. They offer different services such as those related to airport rides, train station pickups and general commuting. Zoomcar also recently added a marketplace option, which MediaNama termed a pivot.
- Payments co Stripe makes 1st India hire
San Francisco-based payments startup Stripe, valued at $5 billion, has hired its first India employee as it looks to kick-start operations here. Anand Balaji, an ex-Amazon executive, has come onboard Stripe and is currently mapping the India market for the company, sources privy to the development told The Times of India. The six-year-old digital payments firm counts Visa, American Express and Sequoia Capital, among others, as its investors. It has emerged as one of the buzziest financial-tech startups globally, by offering software and services to small and medium-sized businesses to build their payments infrastructure. Founded by Irish brothers Patrick and John Collison, Stripe will compete with a bunch of existing payments startups in India — including Razorpay, Citrus Pay and PayU, among others — who, too, are looking to tap the fast-growing set of sellers online. Stripe’s customers are online businesses, many of which have sellers internationally. It works with startups like Lyft, Pinterest, Slack, besides 1,00,000 other businesses, and competes directly with Paypal’s Braintree and Sweden’s Klarna, among a host of other payments enablers globally.
- How failing helps you get starting up right
Failure isn’t such a bad word any more. A generation ago, outside of a few business communities, people looked askance at entrepreneurs. And to fail after trying to start a business was proof of all that was wrong with ‘doing business’ — the fact that it wasn’t a “stable” or “dependable” line of work. Today, the rate of failure in a world where ‘starting up’ is a catchphrase isn’t that much lower. A recent study by startup tracker Xeler8 shows that 43.7% of startups have gone bust since June 2014, most of them in hyped sectors such as logistics, e-commerce, food tech and analytics. What’s changed, though, is the fact that it isn’t seen as such a bad thing. “If 40% is the failure rate, I believe we are in good shape,” says Shripati Acharya, co-founder and managing partner at Prime Venture Partners. “As venture capitalists, 70%-80% failure rate is expected because entrepreneurs are overcoming fairly significant odds. I’d say our ecosystem is doing better than other parts of the world,” says Acharya.
- Infosys cofounder Nandan Nilekani invests in ecommerce startup 10i Commerce Services
Infosys cofounder Nandan Nilekani has put his weight behind an ecommerce startup for the first time, backing a venture that seeks to help small traditional shops fight online and organised retailers with the use of technology. After operating quietly for over a year, Bengaluru-based 10i Commerce Services is aiming to expand quickly across hundreds of towns and cities in India and empower traditional small retail stores with its technology platform ShopX, at a time when they are facing disruption from new-age ecommerce firms. It has so far raised Rs 25-30 crore from Nilekani, who as of now is the sole investor in the startup with a minority stake, according to a source close to the company and documents filed with the Registrar of Companies. Nilekani and 10i Cofounder Amit Sharma refused to comment on funding but confirmed their association. This is Nilekani’s largest investment in a startup since he parked close to $7.5 million in Sedemac, which builds controls for small engines and powertrains.
- ‘Complete ecosystem needed to foster startups’
Despite being the startup hub of the country, Bengaluru has not been able to achieve a complete entrepreneurial ecosystem, especially in science. Compared to the rest of the world, India continues to float on an unsteady base of scientific entrepreneurship driven towards social change.Whether it’s due to a lack of willingness among entrepreneurs in collaborating with scientists or an inadequate support base from the government, India has had difficulty in translating scientific ideas into entrepreneurial ventures.As part of the 53rd Popular Lecture Series, the IISc Alumni Association invited Tarun Khanna, Jorge Paulo Lemann professor, Harvard Business School, to highlight the shortcomings of the entrepreneurial environment in a developing country like India. “Primarily, the country needs a conducive investor mindset which draws away from the profit-making mentality and enables some amount of risk capital for a venture to grow,” he said.
- To cut costs, hyperlocal firms start outsourcing their deliveries
Consumer-facing delivery companies such as Grofers India Pvt. Ltd and Swiggy (Bundl Technologies Pvt. Ltd), which relied on their own crew and fleet of delivery vehicles until recently, have started tying up with logistics start-ups in an attempt to increase efficiency and cut losses. The development comes at a time when investors are growing increasingly cautious about their bets in India and coaxing start-ups to trim costs. Grofers, which rode high on a wave of funding for so-called hyperlocal start-ups in the first half of last year, has roped in Mumbai-based Grab a Grub Services Pvt. Ltd and is in talks to close a deal with Bengaluru-based Opinio (Moonshots Internet Pvt. Ltd) to outsource a part of its deliveries, said two people aware of the development. Grofers still services most of the orders using its own delivery personnel and fleet, said the two persons, who asked not be named. The share of third-party logistics companies may increase after an assessment of the initial outcome.
- Taking Genomic Data Global
Colon cancer is less common in India than in the U.S., but it tends to affect younger people and to be more aggressive when it does occur. Indians with colon cancer also have different genetic mutations from the ones affecting patients who have been studied in Western countries, and whose information is the basis of most published data on the disease. A vegetarian diet may help explain the overall statistics, but why do some Indians develop a more serious form of the disease at a younger age? Doctors suspect that differences in the genome may help explain how colon cancer expresses itself in the two groups. A startup called Global Gene Corp plans to study Indian patients’ genomes to find out what those links may be and whether they yield clues to better treatment. The company will analyze patients’ DNA as well as the genomics of their cancer cells, using algorithms to identify treatment options for individuals—as well as broader trends. Aggregate data could be relevant for pharmaceutical companies looking to develop new medicines, and for policy makers, too.
- Asian VC slump a return to more rational funding levels: Anand Sanwal, CB Insights
Venture capital (VC) deal flow has declined globally and inhibited startup formation and growth in ecosystems worldwide following the economic slowdown in China late last year. The decline in VC funding in Asia has been significant, according to data in CB Insights’ Venture Pulse Report – Q2 2016. While the global startup ecosystem faces economic uncertainty driven by Brexit and the Chinese slowdown, this may, in the long term, actually result in a “rationalisation of the market” says CB Insights founder and CEO Anand Sanwal.
- Tech Startups Aid Auto Majors Embrace New Tech
When it comes to making cars high on technology features, one of the first names coming to mind is Tesla, who have spearheaded the movement on how vehicles and customers interact. However, for other carmakers, the task of building and perfecting new technology may not be so easy to execute and having smaller and newer enterprises with expertise execute it, may be a better option. In November this year, AutoMobility LA will be holding the Annual Top Ten Automotive Startup event to connect carmakers from round the world, in search of new technological innovations, meet up and take a closer look at what smaller and newer companies are on their way to make. Chosen by the advisory board of Automobility LA, 10 finalists will get a showcase the ideas, deemed most probable for success across industries, such as automotive, mobility, and transportation. The board which will go over the entrants and selecting the Top 10 finalists, have executives from Lyft, Google, NVIDIA, Pandora, and the city of LA itself. The unique part of the competition is, there is no single winner as there are 10 finalists who get a chance to showcase their work to the audience present there.
- NSW incubator helps sports-tech startups
The Sydney Sports Incubator (SSI) is NSW Government-sponsored organisation designed to help startups developing new sport-related technology overcome their business hurdles. Launched late last year, it’s based in Sydney’s Olympic Park. Its partners include the Sydney Olympic Park Association (SOPA), NSW Institute of Sport (NSWIS) and SportsCamps Australia (SCA), with Lakeba as a technology partner. Sydney Sports Incubator program manager Steve Roknic told BIT the program was created because the partners saw a need to support innovators with sports applications who were ‘knocking on their doors’ looking for some validation and support. “The SSI reviews and supports sports themed innovation (in software, hardware, nutritional and medical applications) that may have a direct and positive impact on performance within the sports community as a whole from grassroots through to the elite,” Roknic said.